Federal Income Tax Withholding Formula for 2009, 2010
First of all, you subtract the non-taxable bi-weekly Thrift Savings Plan contribution from the gross bi-weekly wages.
Next you will subtract the health care, vision, health care and dependent care deductions from the result of the first subtraction. You add the bi-weekly fringe benefits to the last amount you had and you will have your adjusted bi-weekly gross income. Now you will multiply the adjusted gross bi-weekly amount by 26 to get your answer for annual wages.
Don’t forget to figure in your exemption allowance times the number of exemptions. Now you will subtract that amount from the annual wages to finally determine taxable income. Now you can view a tax withholding table to see where you are on the chart. Find the chart for your filing status and then look for your income bracket.
Does This Sound like a lot of Work?
You may want to take a more error free approach to this by using an online income tax preparation company. The tax software available today is really pretty amazing. Calculators are available for fast and easy computations. The user interface is so easy to understand. I don’t know about you but, I actually trust the computer to do the math for me. I’m a little worried about messing up my tax return without the help of the software that scans my return for any errors.
Help for Business Owners
If you are a business owner and have a lot on your plate already then, I suggest you let the tax experts help you with your tax needs. You don’t even need to know anything about business taxes at all. Audit Alert points out deductions and tax situations that may increase your risk for an IRS audit. The software will double check your return for accuracy and completeness. Turbo Tax Online has all of these benefits and many more. Visit their site today to see their long list of services!
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