Calculate Federal Income Tax Withholding Using Two Methods (pre-2020 Form W-4)

For each employee listed, use both the wage-bracket method and the percentage method to calculate federal income tax withholding for an employee who has submitted a pre-2020 Form W-4. Refer to the Federal Tax Tables in Appendix A of your textbook.

NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.

• Publication 15-T (2020)

1:Michael Daugherty (married; 5 federal withholding allowances) earned weekly gross pay of $855. For each period, he makes a 403(b) retirement plan contribution of 12% of gross pay.

Using wage-bracket method: Federal income tax withholding = $
Using percentage method: Federal income tax withholding = $

2:Carol Harrison (single; 0 federal withholding allowance) earned daily gross pay of $250. For each period, she makes a 401(k) contribution of 10% of gross pay.

Using wage-bracket method: Federal income tax withholding = $
Using percentage method: Federal income tax withholding = $

3:John Moyer (married; 6 federal withholding allowances) earned monthly gross pay of $3,050. He participates in a flexible spending account, to which he contributes $250 during the period.

Using wage-bracket method: Federal income tax withholding = $
Using percentage method: Federal income tax withholding = $

Answer rating: 100% (QA)

1 Wage bracket method As Michael is married and no of withholding allowances is 5 and earns weekly gross pay of 855 his income tax withholding from gr... View the full answer