Answer :
To determine the effect of federal tax on a gross biweekly pay of \[tex]$740 for a single person claiming one exemption, we follow these steps:
1. Identify the Gross Pay: The gross biweekly pay is given as \$[/tex]740.
2. Consult the Federal Tax Table: According to the table provided:
- For wages that are at least \[tex]$740 but less than \$[/tex]760, and for a single person claiming 1 exemption, the federal tax withholding amount is \[tex]$65. 3. Calculate the Net Pay: - The net pay is calculated by subtracting the federal tax withholding amount from the gross pay. - Thus, net pay = gross pay - federal tax withholding. - Net pay = \$[/tex]740 - \[tex]$65 = \$[/tex]675.
4. Interpret the Tax's Effect on Pay:
- The federal tax decreases the gross pay to arrive at the net pay.
- Therefore, the federal tax withholding decreases the net pay by the withholding amount.
5. Choose the Correct Answer:
- The federal tax withholding amount of \[tex]$65 decreases the net pay. - Hence, the correct option is: \[ \text{d. It decreases net pay by \$[/tex]65.}
\]
2. Consult the Federal Tax Table: According to the table provided:
- For wages that are at least \[tex]$740 but less than \$[/tex]760, and for a single person claiming 1 exemption, the federal tax withholding amount is \[tex]$65. 3. Calculate the Net Pay: - The net pay is calculated by subtracting the federal tax withholding amount from the gross pay. - Thus, net pay = gross pay - federal tax withholding. - Net pay = \$[/tex]740 - \[tex]$65 = \$[/tex]675.
4. Interpret the Tax's Effect on Pay:
- The federal tax decreases the gross pay to arrive at the net pay.
- Therefore, the federal tax withholding decreases the net pay by the withholding amount.
5. Choose the Correct Answer:
- The federal tax withholding amount of \[tex]$65 decreases the net pay. - Hence, the correct option is: \[ \text{d. It decreases net pay by \$[/tex]65.}
\]
