Video instructions and help with filling out and completing How Form 2220 Withholding

Instructions and Help about How Form 2220 Withholding

Hi welcome to easy payroll guide in this lesson we're going to be talking about how to use the IRS withholding tables to determine how much you should withhold from an employee's paycheck for federal withholding there are two different methods and in this video we're going to talk about the wage bracket method whenever you're determining how much to withhold from an employee's paycheck you need to make sure that you've had the employee's w-4 form in front of you this form will detail all of the information that you need to know to accurately calculate this tax so this particular withholding form is for John Doe and we can see from the form that he is single and he is claiming one allowance the number of allowances is on line 5 now all of this information is filled out by the employee and you must use this information that they have given you so John is single claims one allowance he is paid on a bi-weekly basis which means that he's paid every other week and for this particular pay period his wages are seven hundred twenty dollars so this is the information that you need to know going forward you need to know their marital status how many allowances what pay period you're using to pay your employees and the amount of wages once you have this information then you're going to go to the IRS website publication 15 publication 15 starting on page 45 you will see the IRS table and this is the table that you will use to determine how much tax to withhold now you have to be very careful because at the top of each table it will tell you the marital status and the pay period and both of these have to match so notice that the first table is for a single person but it's for a weekly payroll period therefore we could not use this for John Doe because he's paid on a bi-weekly payroll period so you would need to page down and they're gonna go single and then married and since he's not married we're gonna continue to page down and then we see single person bi-weekly payroll period and this is the table that we would want to use because both of these match our situation single and bi-weekly once you're on the right table then you're simply going to look for the wage now John was paid seven hundred twenty dollars which is down here towards the end and notice here that it says at least and then but less than so this has at least seven hundred but less than seven twenty now since he was paid seven twenty we cannot use this top when we have to use the one that says at least seven twenty but less than seven forty so this is the table that we would use and I have this on this page you can see it a little easier so here we have 722 seven forty and this is the line that we would read now what you need to do now is say okay how many allowances so Don had one allowance so we need to go to column number one up here and then go down to the line that was seven twenty so column number for one allowance says that John will be withholding fifty-six dollars from his paycheck so that's how you determine how much to withhold from your employees check the paycheck you would need to withhold fifty six dollars from John's paycheck and pay that to the IRS on his behalf and you do that three or nine forty one okay so let's take a look at another example just in case you need one more example for example number two we're gonna take a look at Mary Smith and Mary is married and she is claiming for announces she has a few children so we know that Mary's married her withholding allowances for she gets paid on a semi monthly basis which means that she gets paid twice a month usually it's the 15th and the 30th and her wages for this pay period are 2250 okay so this is the information that we need to take with us as we go to back to the IRS withholding tables so you would go back and I'm gonna continue to scroll down here we see single persons bi-weekly which I know that we do not need and married persons bi-weekly here we have single persons semi-monthly so we had this semi monthly pay period correct but since she's married we need to continue down and here we have married persons semi monthly payroll period and so now we're gonna take a look for the wages and her wages were 2250 so I have to go to the second page of this table where I will find 2250 now these tables are a little bit closer here I see she's between two thousand two hundred forty and two thousand two hundred sixty so she would be on this line and I'm gonna go back to my table here so she is between two thousand two hundred forty and two thousand two hundred sixty she falls right in the middle so we will use this red line and then again we need to go up to number four because she was claiming for allowances so if we go down from number four we see that they will withhold one hundred forty eight dollars so you will need to withhold one hundred forty eight dollars from Mary's paycheck and paid it to the IRS on her behalf that is her federal withholding amount okay and that is for this particular pay period it's if her wages change from pay period to pay period then you would need to do this each pay period for the exact number of wages that she's paid now you'll