Example 4-2 To compute the tax using the 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. -> Wilson Goodman, single(s), has no adjustments on his Form W-4 and earns $915.60 semimonthly. Compute tax from Tax Table A, Semimonthly, Standard Withholding Rate Schedule, page T-3. Step 2 Determine the withholding tax by referring to the appropriate Percentage Method Withholding Table (see Figure 4.6 below). - ($915.60 - $517.00 = $398.60 x 10% = $39.86 + $0) = $39.86 Use the percentage method to compute the federal income taxes to withhold from the wages or salaries of each employee. If an amount is zero, enter "O". If required, round your calculations and final answers to the nearest cent. we go press, the federal income tax rates are being determined budget talks in ashington and not available for publication. For this edition, the 2020 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2020 FICA rates have been used. Check My Work Previous Next Compute tax from Tax Table A, Semimonthly, Standard Withholding Rate Schedule, page T-3. Step 2 Determine the withholding tax by referring to the appropriate Percentage Method withholding Table (see Figure 4.6 below). ($915.60 - $517.00 = $398.60 x 10% = $39.86 + $0) = $39.86 Use the percentage method to compute the federal income taxes to withhold from the wages or salaries of each employee. If an amount is zero, enter "O". If required, round your calculations and final answers to the nearest cent. As we go to press, the federal income tax rates for 2021 are being determined by budget talks in Washington and not available for publication. For this edition, the 2020 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2020 FICA rates have been used. Click here to access the Percentage Method Tables. Employee Employee No. Name Filing Status No. of Withholding Allowances Gross Wage or Salary Amount to Be Withheld 1 James, A. MFJ N/A $1,610 weekly 2 Lake, R. S N/A 825 biweekly 3 Walls, S. MF) N/A 925 semimonthly 4 Free, Y. MF) N/A 2,875 monthly Check My Work Previous Next Example 4-2 To compute the tax using the 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. -> Wilson Goodman, single(s), has no adjustments on his Form W-4 and earns $915.60 semimonthly. Compute tax from Tax Table A, Semimonthly, Standard Withholding Rate Schedule, page T-3. Step 2 Determine the withholding tax by referring to the appropriate Percentage Method Withholding Table (see Figure 4.6 below). - ($915.60 - $517.00 = $398.60 x 10% = $39.86 + $0) = $39.86 Use the percentage method to compute the federal income taxes to withhold from the wages or salaries of each employee. If an amount is zero, enter "O". If required, round your calculations and final answers to the nearest cent. we go press, the federal income tax rates are being determined budget talks in ashington and not available for publication. For this edition, the 2020 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2020 FICA rates have been used. Check My Work Previous Next Compute tax from Tax Table A, Semimonthly, Standard Withholding Rate Schedule, page T-3. Step 2 Determine the withholding tax by referring to the appropriate Percentage Method withholding Table (see Figure 4.6 below). ($915.60 - $517.00 = $398.60 x 10% = $39.86 + $0) = $39.86 Use the percentage method to compute the federal income taxes to withhold from the wages or salaries of each employee. If an amount is zero, enter "O". If required, round your calculations and final answers to the nearest cent. As we go to press, the federal income tax rates for 2021 are being determined by budget talks in Washington and not available for publication. For this edition, the 2020 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2020 FICA rates have been used. Click here to access the Percentage Method Tables. Employee Employee No. Name Filing Status No. of Withholding Allowances Gross Wage or Salary Amount to Be Withheld 1 James, A. MFJ N/A $1,610 weekly 2 Lake, R. S N/A 825 biweekly 3 Walls, S. MF) N/A 925 semimonthly 4 Free, Y. MF) N/A 2,875 monthly Check My Work Previous Next