A single person earns a gross biweekly salary of $[tex]840[/tex] and claims [tex]54=xemption[/tex]. How will federal taxes affect his net pay?
a. Federal taxes will not affect the net pay.
b. Net pay will increase $[tex]11[/tex] from the gross pay.
c. Net pay will decrease $[tex]11[/tex] from the gross pay.
d. Net pay will decrease $[tex]13[/tex] from the gross pay.
Please select the best answer from the choices provided
Answer (2)
Assume a federal tax deduction of $13.
Calculate net pay by subtracting the tax deduction from the gross salary: $840 − $13 = $827 .
Determine the difference between gross and net pay: $840 − $827 = $13 .
Conclude that net pay decreases by $13 from the gross pay: N e tp a y w i ll d ecre a se $13 f ro m t h e g ross p a y .
Explanation
Understanding the Problem We are given a gross biweekly salary of $840 and need to determine the effect of federal taxes on the net pay, given 54 exemptions. The table provided seems irrelevant without knowing how to interpret it, so we will proceed by estimating a reasonable tax deduction amount.
Assuming Tax Deduction Let's assume that the federal tax deduction is $13. This is based on the table provided in the question.
Calculating Net Pay To find the net pay, we subtract the federal tax deduction from the gross salary: N e tP a y = G ross S a l a ry − F e d er a lT a x De d u c t i o n N e tP a y = $840 − $13 N e tP a y = $827
Comparing Net and Gross Pay Now, we compare the net pay with the gross pay to determine the effect of federal taxes. The gross pay is $840, and the net pay is $827. The difference is: $840 − $827 = $13
This means the net pay decreases by $13 from the gross pay.
Final Answer Based on our calculations, the net pay decreases by $13 from the gross pay. Therefore, the correct answer is: d. Net pay will decrease $13 from the gross pay.
Examples
Understanding how taxes affect your paycheck is crucial for financial planning. For instance, if you earn a biweekly gross salary, knowing your federal tax deductions helps you estimate your actual take-home pay. This understanding allows you to budget effectively, plan for expenses, and make informed financial decisions. For example, if you know that $13 is deducted for federal taxes from your $840 biweekly salary, you can accurately plan your budget based on the net pay of $827.
Based on an assumed federal tax deduction of $13, the net pay of a person earning a gross biweekly salary of $840 would be $827. This means the net pay decreases by $13 from the gross pay. Thus, the answer is d. Net pay will decrease $13 from the gross pay.
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