Question

Marilyn has a biweekly gross pay of $810 and claims 3 federal withholding allowances. Marilyn has all of the following deductions from her gross pay:


federal tax from the following table


2007-02-03-00-00_files/i0190000.jpg


Social Security tax that is 6.2% of her gross pay


Medicare tax that is 1.45% of her gross pay


state tax that is 21% of her federal tax


Determine how Marilyn’s net pay will be affected if she increases her federal withholding allowances from 3 to 4.

Answer 1

The answer is C, her net pay will increase by $18.15. 

Answer 2

Answer:

net pay will be increased by $18.15

Step-by-step explanation:

Gross pay of Marilyn = $810

She claims 3 federal withholding allowances = $37 (as per given table)

Her state tax is 21% of her federal tax = 21% × 37

                                                              = 0.21 × 37

                                                             = $7.77

Total amount on 3 withholding allowances claimed  = 37 + 7.77 = $44.77

Now she increases her federal withholding allowances from 3 to 4.

Her new claim withholding allowances = $22 (as per given table)

and her state tax of 21% of her federal tax = 21% × 22

                                                                     = 0.21 × 22

                                                                     = $4.62

New withholding amount on the number 4 federal withholding allowances

= 22 + 4.62 = $26.62

The difference in her net pay would be = 44.77 - 26.62 = $18.15

Her withholding decreased from $44.77 to $26.62 so her net pay will be increased by $18.15