Warm Up: Come to class
Payroll and tax activity Fill out your W-4 to determine the number of exemptions you will claim on your earnings. Complete your Pay Stub with all of the information requested. Personal information, federal, medicare, social security and state taxes. You will need your annual salary for this activity and to know that you are paid bi-monthly or two times per month. Annual salary / # of pay periods Federal Tax Calculation Federal tax Activity-Compare 2019 to 2020 Federal Tax Calculation Example: Determine tax, take-home income, and effective tax rate for $200,000 # Range Money in Bracket Tax rate Tax Paid 1 $0-$9,875 $9,875 10% $987.50 2 $9,876- 40,125 $30,249 12% $3,629.88 3 $40,126-85,525 $45,399 22% $9,987.78 4 $85,526-163,300 $77,774 24% $18,665.76 5 $163,301-207,350 $36.699/ $44,049 32% $11.743.68 Total Tax Paid: $45,014.60 Cumulative Tax rate: 22.5% $45,014.60/$200,000 Example: Monthly gross pay: $4,707 Subtract any W-4 allowances (2): ($667) Adjusted wage: $4,040 From % withholding table(p22) ($192) $3,848 This is your Colorado taxable income Multiply by 4.63% x .0463 $178.16 Actual amount of withholding per month
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