How to Figure Federal Withholding on Taxes
The federal government requires that your employer withhold taxes from your paycheck to be set aside for your income tax bill at the end of the year. Your employer will automatically take out the money and sent it along to the Internal Revenue Service. In order to calculate how much money will be withheld from your paycheck for federal income taxes, you need to know your total paycheck amount, how much is taken out for pretax expenses, how many personal allowances you claimed and how many pay periods you have per year.
Other People Are Reading
Instructions
-
-
1
Calculate how many pay periods you have per year. For example, if you are paid biweekly, you would have 26 pay periods per year.
-
2
Check your financial records or ask your employer how many personal allowances you claimed on your W-4 form.
-
-
3
Multiply your personal allowances by the value of each allowance. The value changes each year with inflation. As of 2010, each allowance was $3,650; if you claimed one allowance, you would have $3,650.
-
4
Divide the value of your personal allowances by the number of pay periods per year to find how much your personal allowances are worth per pay period. In this example, you would divide $3,650 by 26 to get $140.38.
-
5
Subtract the amount from Step 4 from you paycheck before taxes. For example, if you earned $2,140.38 every two weeks, you would subtract $140.38 to get $2,000.
-
6
Subtract the amount of pretax salary reductions from the result from step 5. Pretax salary reductions include contributions to a 401k or 403b plan and contributions to a flexible spending health account. Continuing the example, if you made $300 of contributions to your 401k plan, you would subtract $300 from $2,000 to get $1,700.
-
7
Use the federal income tax withholding tables to determine how much money will be withheld from your paycheck for federal income taxes based on your filing status (married or single) and the amount found in Step 6. Finishing the example, if you were married and had $1,700 of biweekly income subject to federal income tax withholding you would have $242.95 withheld for federal income taxes.
-
1
References
Resources
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
More Like This
Comments
-
if I made 350,000.00 what would be my taxes.
