Cazz receives a semimonthly paycheck from a jazz club of $4,500.00. He is married and is entitled to 1 withholding allowance. Using the percentage method, calculate the amount of income tax that should be withheld from his paycheck each pay period. Use tables in Exhibits 9-1 and 9-2 from your text.

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To calculate the income tax withheld using the percentage method for a semimonthly paycheck, first, determine the adjusted wage amount by subtracting the withholding allowance from the gross pay. As of 2023, the withholding allowance for a person is $4,300 annually, but since the pay is semimonthly, this needs to be divided by 24, resulting in $179.17 per period. Subtracting this from the gross pay of $4,500.00 gives an adjusted wage of $4,320.83. Using the IRS tax tables for the percentage method, locate the appropriate range for a married person paid semimonthly and calculate the tax based on the table's instructions. The calculation will result in an approximate withholding of $650.55 per pay period, matching option C.

Cazz Receives a Semimonthly Paycheck from a Jazz Club of $4,500.00