90.2K

Verified Solution

Link Copied!

PSa 3-6 Calculate Federal (Wage-Bracket Method), State, and Local Income Tax Withholding Refer to Appendix A, 2018 Federal Tax Tables For each employee listed, use the wage-bracket method to calculate federal income tax withholding. Then calculate both the state income tax withholding (assuming a state tax rate of 5% of taxable pay, with taxable pay being the same for federal and state income tax withholding), and the local income tax withholding. 1. Paul Bronson (single; one federal withholding allowance) earned weekly gross pay of $1,247. For each period, he makes a 401(k) retirement plan contribution of 10% of gross pay. The city in which he works (he lives elsewhere) levies a tax of 1.5% of an employee's taxable pay (which is the same for federal and local income tax withholding) on residents, and 0.8% of an employee's taxable pay on nonresidents. 2. Stephen McPherson (married; five federal withholding allowances) earned weekly gross pay of $980. He participates in a flexible spending account, to which he contributed $75 during the period. The city in which he lives and works levies a tax of 2.3% of an employee's taxable pay (which is the same for federal and local income tax withholding) on residents, and 1.6% of an employee's taxable pay on nonresidents. 3. Tyler Howard (married; four federal withholding allowances) earned weekly gross pay of $1,310. For each period, he makes a 403(b) retirement plan contribution of 7% of gross pay. The city in which he lives and works levies a tax of 1.4% of an employee's taxable pay (which is the same for federal and local income tax withholding) on both residents and nonresidents. 4. Alejandro Garcia (single; three federal withholding allowances) earned weekly gross pay of $1,110. He participates in a cafeteria plan, to which he paid $50 during the period. The city in which he works levies a tax of $12/week on employees who work within city limits. Percentage Method Tables for Income Tax Withholding Not over $71 Over But not over (For Wages Paid In 2018) TABLE 1-WEEKLY Payroll Period al SINGLE person (including head of household) (b) MARRIED person w the amount of wages the amount of wages The amount of income tax practing to withhold is is holding allowance withholdingowance is Not Over 222 of NSS over Over But not over -$254..50.00 plus 10% $222 S815 $18.30 plus 126 -1954 $254 31.711 --1.658 $85.62 plus 22 $815 $815 51.711 105 -$3,100 $271.08 plus 24% - 1.650 $3.395 $5.20 -$3.917 $ 100 $617.16 plus 32% $3100 PO 1914 $3917 $9.687. $878.60 plus $3917 57 914 $11.751 59.687 $2,898.10 plus 37% -59.687 $11.751 TABLE 2 BIWEEKLY Payroll Period 571 The amount of income tax to withodis of excess over SO 00h 10% $35 60 plus 12 SSAB $1713 pus 22 $1,711 $3395 5541 84 plus 247 1.734 24 plus 56 280 $1.757 12 plus 35% - $7.914 $3,103 57 plus -$11.751 $1.658 The amount of income taxe to withholdis of excess over (a) SINGLE person (including head of household) (b) MARRIED person the amount of wages The amount of income tax of the amount of wages (after subtracting her subtracting Withholding allowances) is to withhold is: withholding allowance is Not over $142 ........ $0 Not over $444 Over But not over of excess over Over But not over $142 $509 .. $0.00 plus 10% -$142 $444 51.177 $509 $1,631 .. $36.70 plus 12% $509 51.177 3.421 $1.631 -$3,315 .. $171.34 plus 22% -$1,631 $3.421 -36,790 $3,315 --56,200 $541.82 plus 24% -$3.315 $5,790 $12.500 $6,200 -$7,835 . . $1,234 22 plus 32% - $6.200 $12.550 $15 829 $7,835 -$19.373. . $1757.42 plus 35% 57.35 $15.829 523 521 $19.373. ... $5.795.72 plus 37% $19,373 $23,521 TABLE 3 SEMIMONTHLY Payroll Period 000 plus 10% 573 30 plus 125 $342 58 plus 227 $1 083 78 plus 24% $2468 56 plus 326 $3.514 84 plus 35% 56 206 84 plus 37% $3.421 $6.790 -$12.500 515 829 -$23.521 SO (a) SINGLE person (including head of household) (b) MARRIED person- If the amount of wages If the amount of wages (after subtracting The amount of income tax (after subtracting The amount of income tax withholding allowances) is: to withhold is: withholding allowances) is: to withhold is: Not over $154 ......... Not over $481 ......... SO Over But not over- of excess over-Over- But not over- of excess over- -$551 $154 $0.00 plus 10% -$154 $481 5481 $1.275.. $0.00 plus 10% -$551 -$1,767 51.275 $1,275 $39.70 plus 12% -$3.706 .. $79.40 plus 12% $551 -$3,592 $1,767 -$1,767 $185.62 plus 22% $3,706 $3.706 $371.12 plus 22% $7,356 $3,592 -$6.717. -57356 -$3.592 $587.12 plus 24% $7,356 -$13,606 .. $1,174.12 plus 24% -$6,717 -$17,148 .. $2,674.12 plus 32% $6.717 -$13.606 $13,606 -$8,488 . $1,337.12 plus 32% $8,488 -$8,488 -$20,988. $1,903.84 plus 35% -$17,148 $17,148 -$25,481 .. $3,807 56 plus 35% -$20.988 $6,724.11 plus 37% $25,481 - $25.481 $6,278.84 plus 37% $20,988 ....... TABLE4-MONTHLY Payroll Period $7413. - $7,413 (a) SINGLE person (including head of household)-- (b) MARRIED person- If the amount of wages of the amount of wages (after subtracting The amount of income tax (after subtracting The amount of income tax withholding allowances) is: to withhold is: withholding allowances) is: to withhold is: Not over $308 ......... $0 Not over $963.. .. Over But not over- of excess over-Over- But not over- of excess over- $308 -$308 -$1,102 .. $0.00 plus 10% -$963 $963 -$2,550 .. $0.00 plus 10% $158.70 plus 12% --$1,102 $1,102 -$2,550 $2,550 -$3,533 .. $79.40 plus 12% $3,533 - $7,183 .. $371.12 plus 22% $14.713 .. $742.26 plus 22% $7,413 -$7,183 $14713 -$27.213 $2,348 28 plus 24% -$14,713 -$13,433. . $1,174.12 plus 24% $27.213 -$27.213 -$34296. . $5,348.26 plus 32% -$13,433 -$16,975 .. $2,674.12 plus 32% -$34 296 -$50,963.. $7,614,82 plus 35% $34 296 -$16.975 $16.975 -$41,975 .. $3,807.56 plus 35% -$41,975 $50,963 ........... $13,448.21 piss $41,975............ $12,557.56 plus 37% --$3,533 $50,963 $7,183 $13,433

Answer & Explanation Solved by verified expert

See Answer