Sean Matthews is a waiter at the Duluxe Lounge. In his first weekly pay in March

Question

Sean Matthews is a waiter at the Duluxe Lounge. In his first weekly pay in March, he ear $300.00 for the 40 hours he worked. In addition, he reports his tips for February to his employer ($500.00), and the employer withholds t appropriate taxes for the tips from this first pay in March. Calculate his net take-home pay assuming the employer withheld federal income tax (u allowances), social security taxes, and state income tax (2%) 4-2A L0 3 See page 4-15 Use the percentage method Employee Employee to compute the federal income taxes to withhold from the wages or salaries of each employee. Marital Status No. of Withholding Allowances Gross Wage or Salary Amount to Be Withheld Name S1,610 weekly Amoroso, A Finley, R. 825 biweekly 9,630 quarterly Gluck, E. Quinn, S Treave 925 semimonthly 4 2,875 monthly PHOTOGRID

Explanation / Answer

Answer for the first question:

Federal income tax: $43

( Using wage bracket table for Married person with 2 allowances)

Social security taxes: 0.062 x 800 = $49.6

State income tax: $16

Net take home pay: 800 - (43 + 49.6 + 16) = $691.4

Answer 4-2A:

1. Total wage: $1,610 (Weekly)

One allowance: $79.8

Allowances claimed: 4

Amount subject to withholding: 1,610 - (79.8 x 4) = 1610 - 319.2 = $1,290.8

Tax amount to be withheld: $120.936

Calculation :

(1290 - 588) = $702.8 (To find the excess over $588)

702.8 x0.12 = $84.336 (Taking 12%)

84.336 + 36.6 = $120.936 (Final amount to be withheld)

Note: Procedure followed in accordance to Weekly Payroll Table for Married Person.

2. Total wage: $825 (Biweekly)

One allowance: $159.6

Allowances claimed: 0

Amount subject to withholding: $825 (Since no allowance claimed)

Tax amount to be withheld:$74.62

3. Total wage: $9,630 (Quarterly)

One allowance: $1037.5

Allowances claimed: 5

Amount subject to withholding: 9,630 - (1037.5 x 5) = 9,630 - 5187.5 = $4442.5

Tax amount to be withheld: $374.48

4. Total wage: $925 (Semimonthly)

One allowance: $172.9

Allowances claimed: 8

Amount subject to withholding: 925 - (172.9 x 8) = $ 0 (Withholding allowance exceeds the wage amount)

Tax amount to be withheld: $0

5. Total wage: $2,875 (monthly)

One allowance: $345.8

Allowances claimed: 3

Amount subject to withholding: 2,875 - (345.8 x 3) = 2,875 - 1037.4 = $1837.6

Tax amount to be withheld: $87.46

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