Example $4-3$

To compute the tax using the $\backslash (\backslash$mathbf$\{2023\}\backslash )$ Percentage Method for Manual Payroll Systems With Forms W$-4$ From $2020$ or Later using Standard Withholding Rate Schedules, follow the steps illustrated below.

Step $1$

Determine the amount of gross wages earned, filing status, adjustments on Form W$-4,$ and frequency of pay. Note: If the wage ends in a fractional dollar amount, the wage may be rounded to the nearest dollar. However, in this text, exact wages are used.

Step $2$

Determine the withholding tax by referring to the appropriate Percentage Method Withholding Table $($see Figure $4\mathrm{.}6$ below$).$

Wilson Goodman, single $($S$),$ has no adjustments on his Form $\backslash (\backslash$mathrm$\{$W$\}-4\backslash )$ and earns $\backslash (\backslash$$ $915\mathrm{.}60\backslash )$ semimonthly.

Compute tax from Tax Table A$,$ Semimonthly, Standard Withholding Rate Schedule, page T$-3.$

$\backslash ((\backslash$$ $915\mathrm{.}60-\backslash$$ $577\mathrm{.}00=\backslash$$ $338\mathrm{.}60\backslash$times $10\backslash \%=\backslash$$ $33\mathrm{.}86+\backslash$$ $0)=\backslash )\backslash (\backslash$$ $33\mathrm{.}86\backslash )$

Example $4-4$

To use the $2023$ Wage Bracket Method for Manual Payroll Systems With Forms W$-4$ From $2020$ or Later using Standard Withholding, follow the steps illustrated below.

Step $1$

Select the withholding table that applies to the employee's pay period.

Step $2$

Locate the wage bracket $($the first two columns of the table$)$ in which the employee's gross wages fall.

Step $3$

Follow the line for the wage bracket across to the right to the column showing the appropriate filing status with standard withholding. Withhold this amount of tax.

Adrienne Huff is married filing jointly $($MFJ$).$ She is paid weekly at a rate of $\backslash (\backslash$$ $815\backslash ).$

Locate the appropriate wage bracket $($see Figure $4\mathrm{.}7)$:

At least $\backslash (\backslash$$ $815\backslash )$ but less than $\backslash (\backslash$$ $825\backslash )$

Move across the line to the column showing Married Filing Jointly, Standard withholding.

The tax to withhold is $\backslash (\backslash$$ $29\backslash ).$

Use $($a$)$ the percentage method and $($b$)$ the wage$-$bracket method to compute the federal income taxes to withhold from the wages or salaries of each employee.

Enter all amounts as positive numbers. Round your calculations and final answers to the nearest cent.

As we go to press, the federal income tax rates for $2024$ are being determined by budget talks in Washington, and are not available for publication. For this edition, the $2023$ federal income tax tables for Manual Systems with Forms W$-4$ From $2020$ or Later with Standard Withholding and $2023$ FICA rates have been used.

Click here to access the Percentage Method Tables.

Click here to access the Wage$-$Bracket Method Tables.

Amount to Be Withheld