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The Complete Idiot's Guide® To Accounting by Lita Epstein, Shellie L. Moore

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Calculating Payroll Taxes

After you’ve calculated the taxes for each employee, your next step is to build a spreadsheet that summarizes your payroll. You should include the employee’s name plus a code that indicates the filing type and number of withholding allowances being claimed. For example, Jack would be an M-7—married filing jointly, with seven allowances. Judy, who is single claiming one allowance, would be S-1. Jane, who is married claiming three allowances, would be M-3.
To avoid any trouble over pay levels, suppose all these employees are making the same amount. Using the tables, you determine that federal withholding for Jane would be $114. The single tables only go up to $1,250, so you have to use the percentage method for Judy. ...

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