Answer :
To determine how federal taxes affect the net pay of a single person with a gross biweekly salary of [tex]\(\$840\)[/tex] who claims 5 exemptions, we’ll follow these steps:
1. Identify the tax bracket:
- The gross pay is [tex]\(\$840\)[/tex]. According to the federal tax table, we need to find the appropriate range and the amount of tax withheld based on the number of exemptions claimed.
- For the range [tex]\(840 \leq \text{gross pay} < 860\)[/tex]:
2. Locate the exemptions column:
- The person claims 5 exemptions. From the provided table:
[tex]\[ \begin{array}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{2}{|c|}{\text{ If the wages are - }} & \multicolumn{11}{|c|}{\text{ And the number of withholding allowances claimed is - }} \\ \hline \text{At least} & \begin{array}{l} \text{But less } \\ \text{than} \end{array} & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & \text{10+} \\ \hline \multicolumn{2}{|c|}{} & \multicolumn{11}{|c|}{\text{ The amount of income tax withheld is - }} \\ \hline 840 & 860 & 98 & 8o & 62 & 43 & 26 & 13 & 1 & 0 & 0 & 0 & 0 \\ \hline \end{array} \][/tex]
- With 5 exemptions, the tax withheld from a gross pay range of [tex]\(840 \leq \text{gross pay} < 860\)[/tex] is [tex]\(\$13\)[/tex].
3. Calculate net pay:
- The net pay is calculated by subtracting the tax withheld from the gross pay.
[tex]\[ \text{Net Pay} = \text{Gross Pay} - \text{Tax Withheld} \][/tex]
- Substitute the known values:
[tex]\[ \text{Net Pay} = 840 - 13 = 827 \][/tex]
Given the details and the calculations:
- Gross pay: [tex]\(\$840\)[/tex]
- Tax withheld: [tex]\(\$13\)[/tex]
- Net pay: [tex]\(\$827\)[/tex]
The net pay decreases by [tex]\(\$13\)[/tex] from the gross pay, so the correct answer is:
d. Net pay will decrease \$ 13 from the gross pay.
1. Identify the tax bracket:
- The gross pay is [tex]\(\$840\)[/tex]. According to the federal tax table, we need to find the appropriate range and the amount of tax withheld based on the number of exemptions claimed.
- For the range [tex]\(840 \leq \text{gross pay} < 860\)[/tex]:
2. Locate the exemptions column:
- The person claims 5 exemptions. From the provided table:
[tex]\[ \begin{array}{|c|c|c|c|c|c|c|c|c|c|c|} \hline \multicolumn{2}{|c|}{\text{ If the wages are - }} & \multicolumn{11}{|c|}{\text{ And the number of withholding allowances claimed is - }} \\ \hline \text{At least} & \begin{array}{l} \text{But less } \\ \text{than} \end{array} & 0 & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & \text{10+} \\ \hline \multicolumn{2}{|c|}{} & \multicolumn{11}{|c|}{\text{ The amount of income tax withheld is - }} \\ \hline 840 & 860 & 98 & 8o & 62 & 43 & 26 & 13 & 1 & 0 & 0 & 0 & 0 \\ \hline \end{array} \][/tex]
- With 5 exemptions, the tax withheld from a gross pay range of [tex]\(840 \leq \text{gross pay} < 860\)[/tex] is [tex]\(\$13\)[/tex].
3. Calculate net pay:
- The net pay is calculated by subtracting the tax withheld from the gross pay.
[tex]\[ \text{Net Pay} = \text{Gross Pay} - \text{Tax Withheld} \][/tex]
- Substitute the known values:
[tex]\[ \text{Net Pay} = 840 - 13 = 827 \][/tex]
Given the details and the calculations:
- Gross pay: [tex]\(\$840\)[/tex]
- Tax withheld: [tex]\(\$13\)[/tex]
- Net pay: [tex]\(\$827\)[/tex]
The net pay decreases by [tex]\(\$13\)[/tex] from the gross pay, so the correct answer is:
d. Net pay will decrease \$ 13 from the gross pay.
