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Calculate Federal Income Tax Return Refund
How to Calculate Federal Taxes on Gross Income
Gross Income Vs. Taxable Income
How to Calculate your Net Income from Gross Income
Internal Revenue Service (IRS) on behalf of the federal
government, requires employers in the United States
to withhold Federal Income Taxes, Social Security Taxes, and Medicare
Taxes from employee wages.
In general, employers are mandated to withhold taxes on an
employee's earnings before any other deductions are taken out.
These paycheck earnings prior to withholdings being taken out
are considered to be gross pay or income.
Each taxation on the gross income requires a different
calculation to determine how much is withheld for each required
taxation charge. The three main
federal tax withholdings are as follows.
Social Security Tax
Federal Social Security Tax rate is calculated at 4.2 percent of all gross pay
prior to any other taxes being subtracted.
Medicare Tax is taxed at 1.45 percent of all gross pay. It is
required for employers to Withhold
Medicare Tax from all wages paid
to the employee for the year.
Federal Income Tax
The employer is responsible to
Calculate Federal Income Tax according to each employee's W-4
data and IRS Circular E's tax withholding tables. The
employee's filing status can be found on line 3 of their W-4 form and
allowances are found on line 5.
Use the Circular E tax withholding
table, plus the employee's gross
wages and pay period for proper calculations.