MODIFY THE PAYROLL PROJECT TO INCLUDE THE FOLLOWING FINAL SPECIFICATIONS

FEDERAL TAXES

Follow these steps.

Figures are applicable to tax year 2007, but utilise them for this project.

1) ANNUALIZE THE GROSS PAY

Multiply the gross pay by the number of pay periods per year:

WEEKLY : 52

BI-WEEKLY : 26

SEMI MONTHLY : 24

MONTHLY : 12

This result is ANNUALIZED GROSS PAY

2) SUBTRACT 8750 from the ANNUALIZED GROSS PAY. This is the NET GROSS INCOME.

If the NET GROSS INCOME is less than or equal to zero, STOP; there is no federal tax.

3) MULTIPLY THE NUMBER OF EXEMPTIONS/DEDUCTIONS BY 4200.

(The maximum number of deductions/exemptions is 8; any value in excess of 8 will be 8.)

4) SUBTRACT the value obtained in step 3 from NET GROSS INCOME. This is the ADJUSTED GROSS INCOME.

If the ADJUSTED GROSS INCOME is less than or equal to zero, STOP; there is no federal tax.

5) APPLY THE FOLLOWING TO THE ADJUSTED GROSS INCOME

Range Tax is

0 - 10000 11% of Adjusted Gross Income

10000.01 - 35000.00 1100.00 plus 15% of amount over 10000.00

35000.01 - 70000.00 4850.00 plus 27% of amount over 35000.00

Greater 14300.00 plus 33% of amount over 70000.00

6) DEANUALIZE the Tax (Divide by the factor used in step 1)

The result will be FWT (Federal Withholding Tax)

STATE OF WISCONSIN INCOME TAX: 17% of FWT

NET INCOME WILL BE : Gross Pay MINUS the sum of All Taxes