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Federal Income Tax for Employees

The amount of federal income tax that is withheld from employee's paycheck depends on the employee's wages, their marital status, and the number of exemptions (e.g., for dependents) they've claimed on their Form W-4.

  • Federal income tax rates are tiered and determined by total gross income: the greater the gross salary, the higher the tax rate.
  • Employees may claim fewer, but not more exemptions than they are entitled to claim.
  • All allowances are subject to IRS review. Employees who claim more exemptions than they are entitled to will have additional tax liability.
  • Employees may elect an additional amount (in dollars) of federal income tax withholding.
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