What Is the Difference Between Single & Married Withholding?

Tax withholding refers to the process in which an employer withholds the necessary taxes from an employee's paychecks. While Social Security and Medicare taxes are based on flat percentages, federal income tax depends on varying factors, including the employee's filing status. If he claims single or married as his filing status, it can have an impact on his withholding amount.

Identification

The employee states her federal income tax withholding conditions on her W-4 form, which the employer uses to help figure out federal income tax withholding. Depending on her marital status, she can claim single or married on the form, plus additional allowances --- allowances give her a certain sum, which lowers her taxable earnings. The employee claims the allowance if she meets the criteria stated on the W-4. For example, she can claim one allowance if she is single and no one else can claim her as a dependent and one if she's single with only one job. If she's married, she can claim an allowance for her spouse, and one if she's married with only one job and if her spouse is unemployed.

Difference

The difference between claiming single and married is that single places the employee in a higher tax bracket than married. For example, if he claims single with one allowance and earns $550 weekly, his tax withholding is $58 (see page 38 of IRS 2011 Circular E); but if he claims married, his tax withholding is $33 (see page 40). Federal income tax withholding is collectively based on filing status, allowances and income. Therefore, claiming married does not always mean that the employee will pay less federal income tax. For example, he can pay more, if he claims fewer allowances than an employee who has the same earnings but claims single.

Calculations

To figure federal income tax withholding, the employer can use IRS Circular E's wage bracket or percentage method. It uses the wage bracket alternative if the employee's income is within the wage bracket income range and if she claims fewer than 10 allowances; it can use the percentage method at any time. The wage bracket option gives the exact withholding according to the employee's pay period, wages, filing status and allowances. The percentage method is more in-depth. The employer subtracts the employee's allowances sum from her gross income to arrive at taxable earnings. Then it uses the percentage method table specific to the employee's filing status, taxable earnings and pay period to figure the withholding.

Considerations

An employee who fails to submit a W-4 form is subject to tax withholding of single with no allowances; this is the highest tax bracket. If she's married but legally separated or if her spouse is a nonresident alien, she should claim single on her W-4.

References

• IRS: W-4 Form
• IRS: Circular E