Juan is married, is paid 2,000 per week, and claims three withholding allowances. What is the amount of federal income tax withheld from Juan's gross wages for the week using the percentage method?

Question

Quizplus · Accepted Answer

To calculate the federal income tax withheld using the percentage method:
1. Determine the taxable wages: 2,000 - (3 x 125.50 (withholding allowance)) = $1,623.50
2. Use the tax table to determine the applicable tax bracket: Juan falls into the bracket of $1,614 to $2,495, with a percentage rate of 12% on amounts over $1,614.
3. Calculate the federal income tax withheld: ($1,623.50 - $1,614) x 0.12 + $184.30 (tax on first bracket) = $239.23.

Juan Is Married, Is Paid 2,000 Per Week, and Claims