Look at the withholding table below. If you earn $426 in gross income every week and get to keep $348 of it after tax withholding, how many allowances have you claimed?




\multicolumn{3}{|l|}{Weekly Gross Income}
\multicolumn{8}{|c|}{And the number of withholding allowances claimed is....}

At least
But less than012345678

400
410837363534538353535

410
420867565554740363636

420
430887868584942373737

430
440908070605144383837

440
450938373625346393938

450
460958575655548414039

460
470988877675750434140

470
4801009080706052454141

480
4901039382726254474242





AOne
BTwo
CThree
DFour

Verified Answer :

  • Calculate the tax withholding amount by subtracting net income from gross income: \(\$426 - \$348 = \$78\).
  • Locate the income range \(\$420\) to \(\$430\) in the provided table.
  • Match the calculated withholding amount of \(\$78\) to the column labeled 1 in the identified row.
  • Conclude that 1 withholding allowance was claimed, which corresponds to option a. The final answer is \(\boxed{1}\).

Explanation

  1. Analysis of the Problem Data

The problem asks to determine the number of withholding allowances claimed, based on a given weekly gross income and a remaining net income. We are provided with a weekly gross income of \(\$426\) and a net income of \(\$348\). The difference between these two values represents the amount withheld for taxes. Our goal is to find the number of allowances by cross-referencing this withholding amount with the provided table.

  1. Calculating the Withholding Amount

The amount withheld for taxes is calculated by subtracting the net income from the gross income:
\[\text{Withholding Amount} = \text{Gross Income} - \text{Net Income}\]
\[\text{Withholding Amount} = \$426 - \$348 = \$78\]
Thus, the total amount withheld per week is \(\$78\).

  1. Identifying the Withholding Allowances

We identify the row in the table corresponding to the weekly gross income of \(\$426\). Since \(\$426\) falls within the range of \(\$420\) and \(\$430\), we examine the row for "420" to "430":

  • 0 allowances: \(\$88\)
  • 1 allowance: \(\$78\)
  • 2 allowances: \(\$68\)
  • 3 allowances: \(\$58\)
  • 4 allowances: \(\$49\)
  • 5 allowances: \(\$42\)
  • 6 allowances: \(\$37\)
  • 7 allowances: \(\$37\)
  • 8 allowances: \(\$37\)

Comparing our calculated withholding amount of \(\$78\) to the values in this row, we see that it matches the column for 1 allowance.

  1. Conclusion and Final Answer

Based on the table, a withholding amount of \(\$78\) for a weekly gross income of \(\$426\) corresponds to 1 withholding allowance. This matches option 'a'. Therefore, the number of withholding allowances claimed is 1. \(\boxed{1}\).

Examples

In real life, employees often receive pay stubs that show their gross income and their net income (the amount they actually take home). Understanding how to read these documents and how tax withholding works is essential for personal finance management. For example, knowing your number of allowances helps you ensure that the correct amount of tax is being withheld throughout the year, which can help you avoid either owing a large sum or getting a huge tax refund at the end of the year. Knowing how to use these tables is a fundamental skill for interpreting your paycheck.