Federal Tax Withholding Table
There are options for employers when it comes to withholding federal tax. The federal tax withholding table is available from the IRS.
There are several methods you can use for calculating income tax withholding. The Wage Bracket Method, Percentage Method, or an alternative method. Each employee will need to fill out a tax form W-4.
The information on the W-4 includes:
1. Marital status of employee
2. Number of withholding allowances claimed
3. Employee’s request to have additional tax withheld
4. Employee’s claim to exemption from withholding
If an employee does not hand in a completed W-4 tax form, then treat the status as if they were single with no withholding allowances. I’ll give you the basic idea of The Wage Bracket Method of federal tax withholding. You take the employee’s marital status, the number of withholding allowances claimed, and the amount of wages. If wages exceed the amount shown in the last bracket, then you cannot use The Wage Bracket Method, you must use The Percentage Method.
Federal Withholding Tax Information
Employer’s already have enough to do to keep business running productively. If the federal tax withholding table and all the different methods of withholding tax from employee’s paychecks gives you a headache, then I suggest you take advantage of the tax help that is available to you.
QuickBooks Online Payroll can hold your hand and quickly and easily guide you through this tax maze like a GPS system. If you haven’t looked at their web site, you should take a look at all of the tax withholding help available. Not only are federal tax withholding tools available, so are state taxes and other local taxes.
Making sure you pay your part of federal withholding tax is very important to avoid huge fines and penalties from the IRS. You will have to pay quarterly and on time. Employers will save themselves a ton of money by doing this in house instead of hiring an accountant. The software wizards really help guide you right to the correct tax forms and they provide the necessary information you will need when it comes to paying your half of federal withholding tax for each employee.
Give QuickBooks Payroll a try. You can have the first 30 days for free!