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The Curious Bag
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The amount of federal income tax taken out of your paycheck depends on how much you make and how many exemptions you claimed on your W-4 form. You will also have money taken out for federal payroll taxes.
W-4 Form
A W-4 form documents how many exemptions you are claiming for the purposes of income tax withholding. Every employee must file a W-4.
Exemptions
For 2009 and 2010, each exemption you claim reduces your annual income subject to tax withholding by $3,650, which decreases the amount of money that must be withheld from your paycheck during the year.
Number of Exemptions
You can claim as many exemptions as you are entitled to or as few as zero. The more exemptions you claim, the lower the amount that will be taken out of your paycheck. However, you will owe more money (or have a smaller refund) when you file taxes.
Identification
Federal payrolls taxes, also referred to as FICA taxes, are taxes charged to pay for social security and Medicare.
FICA Taxes Amount
The total percentage of FICA taxes is 15.3 percent: 12.4 percent for social security and 2.9 percent for Medicare. However, as an employee, you split these taxes with your employer, so only 7.65 percent of your pay is deducted for FICA taxes.
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