This is the first question I would be asking in this community... I tried to go through some threads but didn't get the complete answer...

I needed a clarification regarding the calculation of NJ state tax .It would be great if someone could help me out in this.

As per my understanding on NJ State tax rules

Married taxpayers filing jointly, qualifying widow or widower and head of household filers face seven rates of which the first three are here...
-- 1.4 percent on the first $20,000 of taxable income.
-- 1.75 percent on taxable income between $20,001 and $50,000.
-- 2.45 percent on taxable income between $50,001 and $70,000.

Net taxable income is $4050. Married filing jointly with a child.

1. What I could not figure out is the amount of $90.76 in the pay stub and the $46.25 for the NJ SUI/DUI Tax. If I go to paycheckcity.com and verify, the state tax is coming to $72.67 and SUI/SDI for $37.46.
2. I see $311.46 as Federal withholding. How is the $311.46 amount coming as a Federal withholding ? I tried searching the net a lot but all I got was information on how Federal income tax is being calculated which is as below. I couldn't figure out how to get to the 311.46 figure. It would be of great help if the experts here could assist me with these two questions.

2008 Tax Brackets
Tax Rate Single Married Filing Jointly
10% Not over $8,025 Not over $16,050
15% $8,025 - $32,550 $16,050 - $65,100
25% $32,550 - $78,850 $65,100 - $131,450
28% $78,850 - $164,550 $131,450 - $200,300
33% $164,550 - $357,700 $200,300 - $357,700
35% Over $357,700 Over $357,700

Ok... I guess I have come close to answer the second one :)... I found that there is no formula for federal withholding... it is based on the IRS Circular E.. as per that... I see for wages 4040-4080 and no: of withholding allowances as 3, the amount is 313. But how the 311.46 accurate figure if its based on this circular ? :confused:

Ok... I made some more progress :)... I checked the instructions in NJ-W4. This falls under Rate B. For Annual Payroll of $20000 - $50000, the amount of income tax to be withheld is $300 + 2.0% of excess of $20000... so in this case

4050 * 12 = $48600
Excess over 20000 = 48600 - 20000 = $28600
$300 + 2.0% of 28600 = $872
872/12 = $72.67 ==> Now that's the amount I found in paycheckcity.com.. but yet to figure out why I see $90.76

Investigating further... ;)

Regarding how much federal income tax is withheld - it's impossible for us to help you without more detail, but you can take a look at Pub 15 to see how tax should be withheld:

http://www.irs.gov/pub/irs-pdf/p15.pdf

Note that the amount of withholding from your pay check depends on the number of exemptions you have claimed on your W4, whether you are single or married, and whether you are paid weekly, bi-weekly, semi-monthly, monthly, etc.

Regarding how much federal income tax is withheld - it's impossible for us to help you without more detail, but you can take a look at Pub 15 to see how tax should be withheld:

http://www.irs.gov/pub/irs-pdf/p15.pdf

Note that the amount of withholding from your pay check depends on the number of exemptions you have claimed on your W4, whether you are single or married, and whether you are paid weekly, bi-weekly, semi-monthly, monthly, etc.

Hi ebaine... I had actually mentioned in the beginning... "Net taxable income is $4050. Married filing jointly with a child." so that makes the no: of federal allowances 3. I am still not clear on how the amounts of 311.46 (Federal withholding) and 90.76(NJ state withholding) is being shown though I could come close :)

If you look at the IRS document I referenced, page 38, you'll see the formulas for determining your withholding. For someone making $4050/month with 3 allowances, your withholding is:

$129.6+ 0.15*(4050-3*291.76 - 1963)= $311.40

Not sure about the extra 6 cents.

If you look at the IRS document I referenced, page 38, you'll see the formulas for determining your withholding. For someone making $4050/month with 3 allowances, your withholding is:

$129.6+ 0.15*(4050-3*291.76 - 1963)= $311.40

Not sure about the extra 6 cents.

Hey ebaines, that's real close.. thxx.. what 3*291.76... I am assuming 3 is the #fed allowances...

Hey ebaines, thats real close..thxx..what 3*291.76... I am assuming 3 is the #fed allowances...

Right. Look at page 36.

Right. Look at page 36.

That's great... solved one question... thx ebaines...

Hope I get some breakthrough on the other qn as well... ;)