Why are federal and state withholding calculations in QuickBooks different than the printed wage bracket tables?
You may notice differences between calculations by QuickBooks and printed wage bracket taxes. QuickBooks uses the more accurate percentage method and tax tables that are annualized (rather than weekly, biweekly, or monthly) to calculate its figures. Small discrepancies of less than $1.00 for any single state or local tax, and up to $6.00 for federal tax, are acceptable. Both methods are correct and acceptable to the IRS. The following example shows how QuickBooks calculates these amounts. Mary Smith receives a semimonthly paycheck. Mary’s Form W-4 states that she is single with one withholding allowance. She is also subject to California state taxes with the same filing status. She earns $7.95 per hour and worked 73 hours in this period. Her gross taxable wages are $580.35. The tax amounts for this period are: • Federal tax tables = $54.00 • QuickBooks FWH = $52.00 • California state table = $4.26 • QuickBooks SWH = $3.
Related Questions
- If a project has both a federal and state prevailing wage rate determination, what wage rate must be paid if different wage rates have been determined for the same trade or occupation?
- Why are federal and state withholding calculations in QuickBooks different than the printed wage bracket tables?
- Why is the federal or state withholding amount not matching my wage bracket?
