Post on 29-Jan-2016
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• What items must be included in What items must be included in your notebook ?your notebook ?
• When is the notebook due?When is the notebook due?• When is your homework dueWhen is your homework due• If you are absent on the day of a If you are absent on the day of a
test, how long do you have to make test, how long do you have to make it up?it up?
• What must be on warm up and What must be on warm up and notes papers? notes papers?
• What must be on homework What must be on homework papers?papers?
• Tests account for what % of your Tests account for what % of your total grade?total grade?
• When can you use electronic When can you use electronic devices?devices?
• What is the most important change What is the most important change that needs to be made? that needs to be made?
2.1 Federal Income Tax , Slide 2 of 43
TIMES UP
• What items must be included in your What items must be included in your notebook ?notebook ?
• When is the notebook due?When is the notebook due?• When is your homework dueWhen is your homework due• If you are absent on the day of a If you are absent on the day of a
test, how long do you have to make test, how long do you have to make it up?it up?
• What must be on warm up and notes What must be on warm up and notes papers? papers?
• What must be on homework papers?What must be on homework papers?• Tests account for what % of your Tests account for what % of your
total grade?total grade?• When can you use electronic When can you use electronic
devices?devices?• What is the most important change What is the most important change
that needs to be made? that needs to be made?
2.1 Federal Income Tax , Slide 4 of 43
2.1 Federal Income Tax , Slide 5 of 43
2.1 Federal Income Tax , Slide 6 of 43
2.1 Federal Income Tax , Slide 7 of 43
2.12.1Federal Federal Income Income
TaxTax
2.1 Federal Income Tax , Slide 8 of 43
Section ObjectiveSection Objective
The focus of this The focus of this lesson is to learn lesson is to learn how to use tables how to use tables to find the to find the amount withheld amount withheld for federal for federal income taxincome tax
2.1 Federal Income Tax , Slide 9 of 43
Federal Income Tax (FIT)
Money withheld by an employer from an
employee’s paycheck
Key Words to Know Key Words to Know
2.1 Federal Income Tax , Slide 10 of 43
FITIs calculated using the tables in the back of the book. The tables
are displayed based on WEEKLY salary. There are separate tables for married and singles.
2.1 Federal Income Tax , Slide 11 of 43
AllowancesThe number of
dependants you claim for purpose of
calculating federal income taxes.
Key Words to Know Key Words to Know
2.1 Federal Income Tax , Slide 12 of 43
WithholdingThe amount of money
that is “held” from your paycheck.
Key Words to Know Key Words to Know
2.1 Federal Income Tax , Slide 13 of 43
Annual SalaryThe salary that you
make YEARLY. Bi-weekly
Every other week
Semi-monthlyTwice a month
2.1 Federal Income Tax , Slide 14 of 43
Gross Pay The amount of your
salary before deductions.Net Pay
The amount of your paycheck.
2.1 Federal Income Tax , Slide 15 of 43
If you get paid every week, how many If you get paid every week, how many checks will you get in annually?checks will you get in annually?
If you get paid every month, how many If you get paid every month, how many checks will you get in annually?checks will you get in annually?
If you get paid every other week, how many If you get paid every other week, how many checks will you get in annually?checks will you get in annually?
If you get paid twice a month, how many If you get paid twice a month, how many checks will you get in annually?checks will you get in annually?
2.1 Federal Income Tax , Slide 16 of 43
If you get paid $300 every week, what If you get paid $300 every week, what would be your annual salary?would be your annual salary?
If you get paid $62,000 annually, what If you get paid $62,000 annually, what would be your monthly pay?would be your monthly pay?
If you get paid $2,500 every other week, If you get paid $2,500 every other week, what would be your annual salary?what would be your annual salary?
If you get paid $40,000 annually, what If you get paid $40,000 annually, what would be your semi-monthly pay?would be your semi-monthly pay?
2.1 Federal Income Tax , Slide 17 of 43
If Mike makes $125 per week, he is single and If Mike makes $125 per week, he is single and claims 1 allowance, what is his weekly FIT claims 1 allowance, what is his weekly FIT
withholding?withholding?
2.1 Federal Income Tax , Slide 18 of 43
If Paul makes $985 per week, is married and If Paul makes $985 per week, is married and claims 6 allowance, what is his weekly FIT claims 6 allowance, what is his weekly FIT withholding?withholding?
2.1 Federal Income Tax , Slide 19 of 43
Carla Garza’s annual pay is $39, 600. She is married and claims 2 allowances—herself and her husband.
What amount will be withheld from Garza’s
pay for FIT?
Example 1 Example 1
2.1 Federal Income Tax , Slide 20 of 43
WHAT DO I DO NOW?
HER PAY IS ANNUAL, BUT THE TABLE IS IN WEEKS…..
2.1 Federal Income Tax , Slide 21 of 43
Example 1 AnswerExample 1 AnswerStep 1:
Calculate Weekly Salary.
$761.54
2.1 Federal Income Tax , Slide 22 of 43
Step 2:
Find the income range from the federal tax tables
2.1 Federal Income Tax , Slide 23 of 43
Lance Han’s annual gross pay is
$31,252. He is single and claims 4
allowance.
What amount will be withheld from Han’s
pay for FIT?
Example 2 Example 2
2.1 Federal Income Tax , Slide 24 of 43
Example 1 AnswerExample 1 AnswerStep 1:
Calculate Weekly Salary.
$601.00
$31,252 ÷ 52 =
2.1 Federal Income Tax , Slide 25 of 43
Step 2:
2.1 Federal Income Tax , Slide 26 of 43
Employee Weekly Income
Allowances Amount Withheld
D. Caine 390.50 1
A. Kim 435.95 2
D. Cadena 399.95 2
H. Nguyen 444.23 1
G. Ginn 382.23 1
K. Morris 421.98 0
C. Dubinski
371.09 4
Assuming they are married, complete the following table:Assuming they are married, complete the following table:
2.1 Federal Income Tax , Slide 27 of 43
2.2 STATE INCOME TAX
2.1 Federal Income Tax , Slide 28 of 43
The focus of The focus of this lesson is to this lesson is to learn how to learn how to calculate state calculate state income tax income tax based on a based on a straight percent straight percent basisbasis
SECTION OBJECTIVE
2.1 Federal Income Tax , Slide 29 of 43
personal exemptions (p.
119)
The number of people an employee
supports, on which taxes are
based
KEY WORDS TO KNOW
2.1 Federal Income Tax , Slide 30 of 43
Taxable wages
ONLY used for state tax
purpose , taxable wages are your wages minus (-) your personal exemptions
KEY WORDS TO KNOW
2.1 Federal Income Tax , Slide 31 of 43
How do I calculate taxable wages
TaxableWages
Annual Gross PayPersonal Exemptions
=–
2.1 Federal Income Tax , Slide 32 of 43
Patricia Line’s gross pay is $65,800 a year.
Line takes a married exemption for herself and
her husband.
What are her taxable wages?
2.1 Federal Income Tax , Slide 33 of 43
Tomoko Nakazawa.Earns $38,657
annually.Married, no dependents.
What is the amount of her personal exemptions?
What are her taxable wages?
2.1 Federal Income Tax , Slide 34 of 43
Stephanie Vanderham.Earns
$96,315annually.Married, 4 children.
What is the amount of her personal exemptions?
What are her taxable wages?
2.1 Federal Income Tax , Slide 35 of 43
How do I calculate annual taxes withheld
Annual Taxes Withheld
Taxable Wages Tax Rate
=
X
2.1 Federal Income Tax , Slide 36 of 43
Patricia Line’s gross pay is $65,800 a year. The state
income tax rate is 3 percent of taxable wages.
Line takes a married exemption for herself and her husband. How much is withheld from her gross pay for state income tax
within the year.
EXAMPLE 1
2.1 Federal Income Tax , Slide 37 of 43
EXAMPLE 1 (CONTD)
Personal Exemptions
Single: $2,000
Married: 4,000
Each Dependent: 2,000
2.1 Federal Income Tax , Slide 38 of 43
Step 1:
Find the taxable wages.
Annual Gross Pay – Personal Exemptions
$65,800.00 – $4,000.00 =
$61,800.00
EXAMPLE 1 ANSWER:
2.1 Federal Income Tax , Slide 39 of 43
Find the annual tax withheld.
Taxable Wages × Tax Rate
$61,800.00 × 3% =
$1,854.00
How much monthly?
$154.50
EXAMPLE 1 ANSWER:
2.1 Federal Income Tax , Slide 40 of 43
Tomoko Nakazawa.Earns $38,657
annually.Married, no dependents.
State Tax rate of 5%How much does she pay annually in state
tax?
EXAMPLE 2
2.1 Federal Income Tax , Slide 41 of 43
Annual Tax $1,732.85
EXAMPLE 1 ANSWER:
If she was paid weekly, how much would be withheld each paycheck?
2.1 Federal Income Tax , Slide 42 of 43
Paul Chamello earns $168,000. He is single.
His personal exemptions include himself and his five
children. The state tax rate is 2.5 percent of
taxable income.
What amount is withheld yearly for state income tax?
ON YOUR OWN 1
2.1 Federal Income Tax , Slide 43 of 43
If her gets paid MONTHLY, how much withholdings each pay check? $325.00
EXAMPLE 1 ANSWER:
Yearly State Income Tax$3,900