Collin is a full-time exempt employee in Juneau, Alaska, who earns $135,000 annually and has not yet reached the Social Security wage base. He is single with 1 withholding allowance and is paid semimonthly. He contributes 3% per pay period to his 401(k) and has pre-tax health insurance and AFLAC deductions of $150 and $25, respectively. Collin has a child support garnishment of $300 per pay period. What is his net pay? (Use the percentage method. Do not round interim calculations, only round final answer to two decimal points.) Table 5. Percentage Method-2017 Amount for One Withholding Allowance
Federal Income tax using percentage method

A) $3,353.05
B) $3,452.08
C) $3,274.60
D) $3,585.14

Question

Collin is a full-time exempt employee in Juneau, Alaska, who earns $135,000 annually and has not yet reached the Social Security wage base. He is single with 1 withholding allowance and is paid semimonthly. He contributes 3% per pay period to his 401(k) and has pre-tax health insurance and AFLAC deductions of $150 and $25, respectively. Collin has a child support garnishment of $300 per pay period. What is his net pay? (Use the percentage method. Do not round interim calculations, only round final answer to two decimal points.) Table 5. Percentage Method-2017 Amount for One Withholding Allowance
Federal Income tax using percentage method
 
A) $3,353.05 
B) $3,452.08 
C) $3,274.60 
D) $3,585.14

Quizplus · Accepted Answer

1. Calculate gross pay per pay period: 
$135,000 / 24 = $5,625

2. Calculate total pre-tax deductions per pay period: 
$150 + $25 = $175

3. Calculate taxable income per pay period: 
$5,625 - $175 - ($5,625 * 0.03) = $5,152.50

4. Calculate federal income tax withholding per pay period using the percentage method and the IRS publication 15 (Circular E) tables: 
- Determine the amount for one withholding allowance: $4,050 / 26 = $155.77 
- Calculate Collin's withholding allowances: 1 
- Use Table 5 to determine the percentage to use: 22% for pay periods ending after 12/31/2017 
- Calculate federal income tax withholding: ($5,152.50 - $155.77) * 0.22 - $344.80 = $798.08

5. Calculate net pay per pay period: 
$5,152.50 - $798.08 - $300 = $4,054.42

Therefore, the answer is B as it is the only option that is closest to the calculated net pay of $4,054.42.

Collin Is a Full-Time Exempt Employee in Juneau, Alaska, Who