October FIGURING YOUR FEDERAL TAXES EFFECTIVE January MONTHLY PAYROLL To by barto

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									October 2007
                                                 FIGURING YOUR FEDERAL TAXES
                                                           EFFECTIVE January 1, 2007


MONTHLY PAYROLL                                                                                         BIWEEKLY PAYROLL

To determine the tax amount to be withheld, take your current Fed                 To determine the tax amount to be withheld, take your current
taxable gross (not total gross), displayed at the bottom of your pay              Fed taxable gross (not total gross), displayed at the bottom of
stub, and multiply it by 12 (12 paydays in a year). Then subtract                 your pay stub, and multiply it by 26 (26 paydays in a year).
$3,400.00 for each exemption claimed, which is displayed at the top               Then subtract $3,400.00 for each exemption claimed, which is
right of your stub. Use the remainder and the appropriate annual                  displayed at the top right of your stub. Use the remainder and
tax table, based on claiming as ‘Single’ or ‘Married’, to establish               the appropriate annual tax table, based on claiming ‘Single’ or
your tax on an annual basis. Divide this annual tax figure by 12 to               ‘Married’, to establish your tax on an annual basis. Divide this
arrive at the Federal Tax withheld from your current monthly pay.                 annual tax figure by 26 to arrive at the Federal Tax withheld
                                                                                  from your current biweekly pay.

                                                                  ANNUAL PAYROLL
SINGLE person (including head of household) -                                    MARRIED person -
If the amount of wages                                                           If the amount of wages
(after subtracting                  The amount of income tax                     (after subtracting            The amount of income tax
Withholding allowances) is:          to withhold is:                             Withholding allowances) is:   to withhold is:

Not over $2,650…………                 $0                                           Not over $8,000 …………          $0

  Over        But not over                                      of excess over   Over         But not over                                of excess over
$ 2,650         $10,120           10%                                  $2,650    $ 8,000           $23,350       10%                              $8,000
$ 10,120        $33,520           $747.00 plus 15%                    $10,120    $ 23,350          $70,700       $1,535.00 plus 15%              $23,350
$ 33,520        $77,075           $4,257.00 plus 25%                  $33,520    $ 70,700         $133,800       $8,637.50 plus 25%              $70,700
$ 77,075       $162,800           $15,145.75 plus 28%                 $77,075    $133,800         $203,150       $24,412.50 plus 28%            $133,800
$162,800       $351,650           $39,148.75 plus 33%                $162,800    $203,150         $357,000       $43,830.50 plus 33%            $203,150
$351,650                          $101,469.25 plus 35%               $351,650    $357,000                        $94,601.00 plus 35%            $357,000




                                                   FIGURING YOUR STATE TAXES
                                                               EFFECTIVE October 1, 2007


Employees paid MONTHLY – Subtract $283.33 from your Federal                        Employees paid BIWEEKLY – Subtract $130.77 from your
taxable monthly gross for each exemption claimed. The remainder is                 Federal taxable biweekly gross pay for each exemption
subject to withholding at the rate of 4.35%                                        claimed. The remainder is subject to withholding at the rate
                                                                                   of 4.35%

                                                                   2007 FICA TAX

Take your FICA Taxable Gross, displayed at the bottom of your pay stub and apply rates as follows:
The 2007 Social Security (FICA) tax contains two parts. The Social Security (Old Age, Survivors, and Disability Insurance) FICA tax is
based on the first $97,500 paid at the rate of 6.2% with a maximum amount withheld of $6,045.00. The Medicare (Medical Hospital
Insurance) FICA tax is based on all earnings paid at the rate of 1.45%. (There is no limit on the Medicare FICA gross. The limit was
eliminated as part of the Omnibus Budget Reduction Act of 1993).

                                                                 2007 CITY TAXES
Personal and dependency exemptions allowable for Michigan income tax purposes are also allowable for Michigan cities. The annual
allowance for all cities is $600, except Grand Rapids. The annual rate equals $23.08 biweekly or $50.00 monthly. For Grand Rapids the
annual allowance is $750, which equals $28.84 biweekly or $62.50 monthly.

The rate on taxable earnings is 1% for residents and 0.50% for non-residents. These rates are uniform for all cities except Detroit
and Grand Rapids. For Detroit, the rate is 2.5% for residents and 1.25% for non-residents. For Grand Rapids, the rate is 1.3% for
residents and 0.65% for non-residents.

                                                                   SEE REVERSE
                                                        PAYROLL NOTICE
                                     TAX “EXEMPT” STATUS FOR FEDERAL INCOME TAX

If a student employee feels that they are eligible to BEGIN OR CONTINUE the “Exempt” status during 2007, THEY MUST
COMPLETE a NEW FEDERAL W-4 FORM EACH YEAR. If qualified, remember to write the word “Exempt” in Box 7 on the W-4.

This form expires on February 15 of the following year. You will begin having taxes withheld again unless you complete a new Form
W-4 each year to continue the EXEMPT STATUS.
1. WHEN CAN A STUDENT CLAIM EXEMPT FROM FEDERAL INCOME WITHHOLDING?
   If a student’s parent(s) or someone else will claim the student as a dependent on their annual tax return, the student cannot claim
   exempt if the student’s own wages plus any non-wage income, such as interest on savings, will exceed $850.00 in total.
   If no one else will claim the student as a dependent on their annual tax return, then the student can claim exempt if the total wages and
   other income will not exceed $8,750.00 if single. Or, if married the combined wages and other income will not exceed $17,500.00.
   As a student, please read the W-4 instructions thoroughly to make sure that you qualify for EXEMPT before completing the W-4.

NOTE: NON-RESIDENT ALIENS are not allowed to claim exempt from income taxes.




2. WHEN CAN A STUDENT CLAIM EXEMPT FROM STATE INCOME WITHHOLDING?
   Students must be eligible to and be claiming exempt for Federal Income tax purposes in order to be eligible to claim exempt for State
   Income taxes. Also, their total earnings must be $3,400.00 or less for the year.

								
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