Calculating Federal Tax Withholding

Oct 13, 2025 by wbrum.org 97 views

Understanding Federal Tax Withholding: A Case Study of Marilyn's Biweekly Pay

In the United States, federal tax withholding is a crucial aspect of an individual's income, as it determines the amount of taxes deducted from their paychecks. In this article, we will delve into the world of federal tax withholding, using Marilyn's biweekly gross pay as a case study. Marilyn has a biweekly gross pay of $810 and claims 3 federal withholding allowances. We will explore the various deductions from her gross pay, with a focus on federal tax withholding.

Federal tax withholding is the amount of taxes deducted from an individual's paychecks by their employer. The amount of federal tax withheld depends on several factors, including the individual's gross income, the number of withholding allowances claimed, and the tax filing status. In Marilyn's case, she has a biweekly gross pay of $810 and claims 3 federal withholding allowances.

Calculating Federal Tax Withholding

To calculate federal tax withholding, we need to use the tax tables provided by the Internal Revenue Service (IRS). The tax tables take into account the individual's gross income, withholding allowances, and tax filing status. For Marilyn, we will use the 2022 tax tables, which are the most recent available.

Step 1: Determine the Taxable Income

Marilyn's biweekly gross pay is $810. To calculate her taxable income, we need to subtract the number of withholding allowances claimed from her gross income. Marilyn claims 3 withholding allowances, so we subtract 3 from her gross income:

$810 (gross income) - 3 (withholding allowances) = $807 (taxable income)

Step 2: Determine the Tax Bracket

Next, we need to determine the tax bracket for Marilyn's taxable income. The tax brackets are as follows:

10%: $0 - $9,875
12%: $9,876 - $40,125
22%: $40,126 - $80,250
24%: $80,251 - $164,700
32%: $164,701 - $214,700
35%: $214,701 - $518,400
37%: $518,401 and above

Marilyn's taxable income is $807, which falls within the 10% tax bracket.

Step 3: Calculate the Federal Tax Withheld

Now that we have determined the tax bracket, we can calculate the federal tax withheld. We will use the tax tables provided by the IRS to determine the amount of federal tax withheld.

Using the 2022 tax tables, we find that the federal tax withheld for a single person with a taxable income of $807 is $81.40.

In addition to federal tax withholding, Marilyn has other deductions from her gross pay. These include:

Social Security Tax: 6.2% of gross income
Medicare Tax: 1.45% of gross income
State and Local Taxes: varies by state and locality

Calculating Social Security Tax

To calculate Social Security tax, we need to multiply Marilyn's gross income by 6.2%:

$810 (gross income) x 0.062 = $50.22 (Social Security tax)

Calculating Medicare Tax

To calculate Medicare tax, we need to multiply Marilyn's gross income by 1.45%:

$810 (gross income) x 0.0145 = $11.65 (Medicare tax)

Calculating State and Local Taxes

The amount of state and local taxes varies by state and locality. For the purpose of this example, we will assume that Marilyn lives in a state with a 5% state income tax and a 1% local income tax.

$810 (gross income) x 0.05 = $40.50 (state income tax) $810 (gross income) x 0.01 = $8.10 (local income tax)

Now that we have calculated all the deductions, we can determine the total deductions from Marilyn's gross pay:

Federal tax withheld: $81.40
Social Security tax: $50.22
Medicare tax: $11.65
State and local taxes: $48.60

Total deductions: $182.87

To determine Marilyn's net pay, we need to subtract the total deductions from her gross pay:

$810 (gross income) - $182.87 (total deductions) = $627.13 (net pay)

In this article, we have explored the world of federal tax withholding, using Marilyn's biweekly gross pay as a case study. We have calculated the federal tax withheld, as well as other deductions from her gross pay, including Social Security tax, Medicare tax, and state and local taxes. By understanding these deductions, individuals can better plan their finances and make informed decisions about their income.
Frequently Asked Questions: Federal Tax Withholding and Other Deductions

In our previous article, we explored the world of federal tax withholding, using Marilyn's biweekly gross pay as a case study. We calculated the federal tax withheld, as well as other deductions from her gross pay, including Social Security tax, Medicare tax, and state and local taxes. In this article, we will answer some frequently asked questions about federal tax withholding and other deductions.

Q: What is the purpose of federal tax withholding?

A: The purpose of federal tax withholding is to collect taxes from an individual's income and pay them to the government on their behalf. This helps to ensure that individuals pay their fair share of taxes and reduces the likelihood of tax evasion.

Q: How is federal tax withholding calculated?

A: Federal tax withholding is calculated using the tax tables provided by the Internal Revenue Service (IRS). The tax tables take into account the individual's gross income, withholding allowances, and tax filing status.

Q: What is the difference between federal tax withholding and state and local taxes?

A: Federal tax withholding is the amount of taxes deducted from an individual's income by their employer and paid to the federal government. State and local taxes, on the other hand, are taxes collected by the state and local governments and are typically paid by individuals directly.

Q: How do I claim withholding allowances?

A: Withholding allowances are claimed on an individual's W-4 form, which is submitted to their employer. The number of withholding allowances claimed determines the amount of taxes withheld from an individual's income.

Q: What is the Social Security tax?

A: The Social Security tax is a tax on an individual's income that is used to fund the Social Security program. The Social Security tax is 6.2% of an individual's gross income, and is typically withheld by an individual's employer.

Q: What is the Medicare tax?

A: The Medicare tax is a tax on an individual's income that is used to fund the Medicare program. The Medicare tax is 1.45% of an individual's gross income, and is typically withheld by an individual's employer.

Q: How do I calculate my net pay?

A: To calculate your net pay, you need to subtract the total deductions from your gross income. This includes federal tax withheld, Social Security tax, Medicare tax, and state and local taxes.

Q: What is the difference between gross income and net income?

A: Gross income is the total amount of money an individual earns from their job, before any deductions are taken out. Net income, on the other hand, is the amount of money an individual takes home after all deductions have been taken out.

Q: Can I change my withholding allowances?

A: Yes, you can change your withholding allowances at any time. You will need to submit a new W-4 form to your employer, which will update your withholding allowances and adjust the amount of taxes withheld from your income.

In this article, we have answered some frequently asked questions about federal tax withholding and other deductions. We hope that this information has been helpful in understanding the world of federal tax withholding and other deductions. If you have any further questions, please don't hesitate to contact us.

Internal Revenue Service (IRS) website: www.irs.gov
IRS Publication 15: www.irs.gov/pub/irs-pdf/p15.pdf
IRS Form W-4: www.irs.gov/forms-pubs/about-form-w-4