Tax Tables and Withholding Allowances

Oct 13, 2025 by talynt.org 55 views

Introduction

Federal tax withholding is a crucial aspect of the tax system, where employers deduct a portion of an employee's salary to pay federal income taxes. In this article, we will explore the concept of federal tax withholding using a real-life example of Khalid Khouri, who has a gross weekly salary of $675 and claims four withholding allowances. We will use the tax tables provided by the Internal Revenue Service (IRS) to determine the federal tax withholding to be deducted from his weekly salary.

Tax Tables and Withholding Allowances

The IRS provides tax tables that employers use to calculate federal tax withholding. These tables are based on the employee's gross income and the number of withholding allowances claimed. In this case, Khalid Khouri claims four withholding allowances, which means he is eligible for a larger standard deduction.

Calculating Federal Tax Withholding

To calculate federal tax withholding, we need to refer to the tax tables provided by the IRS. The tax tables are based on the employee's gross income and the number of withholding allowances claimed. In this case, Khalid Khouri has a gross weekly salary of $675 and claims four withholding allowances.

Step 1: Determine the Taxable Income

The first step in calculating federal tax withholding is to determine the taxable income. This is done by subtracting the standard deduction from the gross income. The standard deduction for 2023 is $13,850.

Taxable Income = Gross Income - Standard Deduction
Taxable Income = $675 - $13,850
Taxable Income = $0 (since Khalid's gross income is less than the standard deduction)

Step 2: Determine the Tax Bracket

Since Khalid's taxable income is $0, we need to determine the tax bracket. The tax brackets are as follows:

Taxable Income	Tax Rate
$0 - $9,875	10%
$9,876 - $40,125	12%
$40,126 - $80,250	22%
$80,251 - $164,700	24%
$164,701 - $214,700	32%
$214,701 - $518,400	35%
$518,401 - $622,050	37%

Since Khalid's taxable income is $0, he falls into the 10% tax bracket.

Step 3: Calculate the Tax Withholding

Now that we have determined the tax bracket, we can calculate the tax withholding. The tax withholding is calculated as follows:

Tax Withholding = Taxable Income x Tax Rate
Tax Withholding = $0 x 10%
Tax Withholding = $0

However, this is not the final answer. We need to consider the tax tables provided by the IRS. The tax tables are as follows:

Gross Income	Tax Withholding
$0 - $200	$0
$201 - $400	$20
$401 - $600	$40
$601 - $800	$60
$801 - $1,000	$80

Since Khalid's gross income is $675, we need to refer to the tax table to determine the tax withholding.

Tax Withholding = $60

Step 4: Calculate the Net Pay

The final step is to calculate the net pay. The net pay is calculated as follows:

Net Pay = Gross Income - Tax Withholding
Net Pay = $675 - $60
Net Pay = $615

Conclusion

In this article, we used the tax tables provided by the IRS to calculate the federal tax withholding for Khalid Khouri, who has a gross weekly salary of $675 and claims four withholding allowances. We determined that the tax withholding is $60, and the net pay is $615. This example illustrates the importance of understanding federal tax withholding and how it affects an employee's take-home pay.

References

Internal Revenue Service. (2023). Tax Tables.
Internal Revenue Service. (2023). Withholding Allowances.

Glossary

Tax Withholding: The amount of taxes deducted from an employee's salary by their employer.
Withholding Allowances: The number of exemptions an employee claims on their tax return, which affects the amount of taxes deducted from their salary.
Tax Bracket: The range of taxable income that is subject to a particular tax rate.
Net Pay: The amount of an employee's salary that is left after taxes have been deducted.
Federal Tax Withholding: A Q&A Guide =====================================

Introduction

Federal tax withholding is a crucial aspect of the tax system, where employers deduct a portion of an employee's salary to pay federal income taxes. In our previous article, we explored the concept of federal tax withholding using a real-life example of Khalid Khouri, who has a gross weekly salary of $675 and claims four withholding allowances. In this article, we will answer some frequently asked questions about federal tax withholding.

Q&A

Q: What is federal tax withholding?

A: Federal tax withholding is the amount of taxes deducted from an employee's salary by their employer to pay federal income taxes.

Q: Why is federal tax withholding necessary?

A: Federal tax withholding is necessary to ensure that employees pay their fair share of taxes throughout the year, rather than paying a large tax bill at the end of the year.

Q: How is federal tax withholding calculated?

A: Federal tax withholding is calculated using the tax tables provided by the IRS, which take into account the employee's gross income and the number of withholding allowances claimed.

Q: What is a withholding allowance?

A: A withholding allowance is an exemption claimed by an employee on their tax return, which affects the amount of taxes deducted from their salary.

Q: How many withholding allowances can I claim?

A: The number of withholding allowances you can claim depends on your marital status and the number of dependents you have. You can claim one withholding allowance for yourself, your spouse, and each dependent.

Q: What happens if I claim too many withholding allowances?

A: If you claim too many withholding allowances, you may end up paying too little in taxes throughout the year, which can result in a larger tax bill at the end of the year.

Q: Can I change my withholding allowances?

A: Yes, you can change your withholding allowances at any time by submitting a new Form W-4 to your employer.

Q: How often is federal tax withholding paid?

A: Federal tax withholding is typically paid on a bi-weekly or semi-monthly basis, depending on the employer's pay schedule.

Q: Can I get a refund of my federal tax withholding?

A: Yes, if you overpaid your federal taxes throughout the year, you may be eligible for a refund.

Q: How do I know if I'm paying too much or too little in federal taxes?

A: You can check your pay stubs to see how much federal tax is being withheld from your salary. If you're paying too much, you may want to consider adjusting your withholding allowances. If you're paying too little, you may want to consider increasing your withholding allowances.

Conclusion

Federal tax withholding is an important aspect of the tax system, and understanding how it works can help you make informed decisions about your taxes. By answering these frequently asked questions, we hope to have provided you with a better understanding of federal tax withholding and how it affects your take-home pay.

References

Internal Revenue Service. (2023). Tax Tables.
Internal Revenue Service. (2023). Withholding Allowances.
Internal Revenue Service. (2023). Form W-4.

Glossary

Federal Tax Withholding: The amount of taxes deducted from an employee's salary by their employer to pay federal income taxes.
Withholding Allowance: An exemption claimed by an employee on their tax return, which affects the amount of taxes deducted from their salary.
Tax Bracket: The range of taxable income that is subject to a particular tax rate.
Net Pay: The amount of an employee's salary that is left after taxes have been deducted.