Question

Use Figure 2.2. Patrice Matson works for a company that uses a percentage method to compute income tax withheld. Patrice is single and claims two allowances. She earns $480 a week. Find the amount of income tax withheld.

SINGLE PERSONS - WEEKLY PAYROLL PERIOD
Weekly Taxable Wage The amount of income tax to withhold is:
Over - But not Over -
$51 $195 0.00 + [0.10 (Taxable Wage - 51)]
$195 $645 14.40 + [0.15 (Taxable Wage - 195)]
$645 $1,482 81.90 + [0.25 (Taxable Wage - 645)]
A.
$38.11
B.
$57.15
C.
$67.62
D.
$76.88

Answer 1

Answer: Tax = $57.15

Therefore, the amount of income tax withheld from Patrice's weekly earnings of $480, considering her single filing status and two allowances, is $57.15.

Explanation:

According to Figure 2.2, Patrice's weekly taxable wage is $480, and she is single with two allowances. To find the amount of income tax withheld, we need to determine the applicable tax rate based on her taxable wage range.

1. Patrice's taxable wage falls in the range of $195 to $645. According to the table, the formula to calculate the income tax withheld in this range is:

Tax = $14.40 + [0.15 (Taxable Wage - $195)]

2. Substituting Patrice's taxable wage into the formula:

Tax = $14.40 + [0.15 ($480 - $195)]

3. Simplifying the subtraction inside the brackets:

Tax = $14.40 + [0.15 ($285)]

4. Calculating the product inside the brackets:

Tax = $14.40 + $42.75

5. Adding the two amounts: