Federal Withholding Tax Table  

        The good news is that due to the Jobs and Growth Tax Relief Reconciliation Act of 2003, workers are now getting more money when they take their paychecks home. The new federal withholding tax table has lower tax rates for employers to use when they want to figure out how much federal income tax they should withhold from an employee’s wages.

      The changed tax rate was made retroactive from the beginning of 2003 and the Congress realizes that many employees would have had higher amounts withheld as per the rates under the previous tax law. However, those employees who have extra amount withheld as per the old tax law, will get a refund of the amount through the normal tax filing system and not through the payor. This means that employers were advised not to correct the amounts that were withheld earlier.

       In addition, employees could take steps to adjust their withholding so that the tax paid is nearer to the tax owed. However, employees could claim more allowances than they were entitled to based on their current exemptions, deductions and credits.

         Ever since 2003, changes are being made to the federal withholding tax table. In 2008, a new federal withholding tax table will be used and this was notified by the IRS through Publication 15 of the Employer’s Tax Guide. The table gives information not just on federal withholding but also FICA tax, Medicare tax and FUTA taxes. For 2008, the federal withholding tax table is as follows:

Single persons

Married Persons

Earnings

Addon

Rate

10,300.00

765.00

15.00%

33,960.00

4,314.00

25.00%

79,725.00

15,755.25

28.00%

166,500.00

40,052.25

33.00%

359,650.00

103,791.75

35.00%

Earnings

Addon

Rate

23,550.00

1,555.00

15.00%

72,150.00

8,845.00

25.00%

137,850.00

25,270.00

28.00%

207,700.00

44,828.00

33.00%

365,100.00

96,770.00

35.00%

Deductions per dependant: $3,500
Supplemental income rate: 25 percent

 

Additional Federal Payroll Taxes

Tax

Maximum Earnings

Rate

FICA

102,000.00

6.20%

Medicare

Unlimited

1.45%

FUTA

7,000.00

0.80%

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Federal Withholding Tax Table

 

 

    
 
          Any interest that you receive or that is credited into your account and can be withdrawn is termed as taxable interest. This interest is treated as taxable income and you have to report it on your tax return. Interests you receive from bank accounts, loans you make out to other, or interest from any other source is considered to be taxable interest. More...
 


 

 

 
   
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