How Do You Calculate Federal Withholding Tax Using the Percentage Tables?


Quick Answer

To calculate federal withholding tax using the percentage tables, determine your filing status, calculate taxable income, and then find the appropriate category on the percentage table. Income tax rates change periodically, thus the withholding tax amounts can vary.

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Full Answer

  1. Determine your filing status

    Visit the official IRS website to fill out a questionnaire that determines your filing status. Tax filing statuses are impacted by marital age and costs incurred to maintain a household. The relevant statuses to choose from include single, married filing jointly, married filing separately, head of household or qualified widow.

  2. Calculate taxable income

    Taxable income is based on income, deductions and any applicable credits. Income is generated from various sources such as wages, salaries, tips, dividends and interest. Don't include gifts or donations in income calculation. Deductions are based on various factors such as number of dependents, medical history and home ownership status. Subtract the deductions from the income to arrive at taxable income. Apply any credits if eligible.

  3. Find the appropriate category on the percentage table

    The Internal Revenue Service provides percentage tables that are categorized by filing status. Find the table that corresponds to your filing status. This table contains various taxable income figures. Locate your taxable income figure, and then apply the corresponding tax rate to arrive at your total tax liability.

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