Calculate Federal Withholding Taxes
There are important factors that impact the calculation of your federal income taxes.
These factors include: marital status, number of withholding allowances (exemptions), and amount of your gross earnings during the year.
Other factors include tax reductions such as Public Employees Retirement System (PERS) and TIAA/CREF retirement contributions that combine to determine what amount of federal income tax is owed.
Calculate Federal Withholding
In the United States, withholding taxes on wages by employers is required by the federal government as well as most state, and some local governments. Taxes withheld include:
- Federal Income Tax
- Social Security Tax
- Medicare Taxes
- State Income Tax
- Certain other levies by some states.
- Employees Social Security Number
- Declared Number of Withholding Allowances
Withholding allowances includes personal exemptions, itemized deductions, plus losses, or credits.
Employers are entitled to rely on employee declarations on Form W-4 unless they know they are aware of inaccuracies.
The following steps describe how to calculate your federal income taxes:
- Determine the value of your total withholding allowances (exemptions) as claimed on your current W-4 Form by multiplying each allowance (exemption) by the semi-monthly amount of $158.33.
- Subtract the amount of any salary reductions, such as PERS, TIAA/CREF, or health insurance premium from your total semi-monthly gross earnings.
- Subtract STEP 1 from STEP 2 to determine your taxable gross wages.
- Use the calculator above to calculate the amount of your federal income taxes. Be sure to select the proper setting based upon your marital status (single or married) as marked on your current W-4 Form.
You can then file your taxes traditionally or do your taxes online using tax software like TurboTax or H&R Block when you are ready to file.
If you do not have enough taxes withheld over the year, or fail to pay enough in estimated taxes, you may be subjected to a penalty for underpaying with your tax payments.