EXHIBIT C Tax table under present law Tax table of persons with incomes under $5,000 not computing tax on page 3 Read down the shaded columns below until you find the line covering the total income you entered in item 6, page 1. Then read across to the column headed by the number corresponding to the number of persons listed in item 1, page 1. Enter the tax you find there in item 7, page 1 1.075 1, 100 91 2,250 2,275 292 197 102 7 2,275 2, 300 296 201 106 11 2, 300 2, 325 300 205 110 15 1,700 1,725 198 103 8 1,725 1,750 202 107 12 3,850 1,750 1,775 206 111 16 3,900 1,775 1,800 211 116 21 1,800 1,825 215 120 25 133 38 232 137 42 236 141 46 2,825 387 291 196 101 336 4,400 4, 450 2,075 2,100 262 167 72 4, 550 690 585 481 377 282 187 92 299 307 316 324 6 15 23 32 40 49 57 75 178 83 100 109 117 126 31 134 39 --------- Tax Tables Required Under H. R. 4790 TAX TABLE No. 1.—For single persons or married persons filing separate return with incomes under $5,000 and not computing tax on page 3 If total income TAX TABLE No. 2.-For husband and wife filing joint return with income under $5,000 and not computing tax on page 3 And the number of exemptions claimed in item 1, page 1, is— (This page may be disregarded by any employer using the wage-bracket tables) The percentage method involves several calculations. reference must be made to the following table: In using this method The steps in computing the tax to be withheld are summarized below. 1. Multiply the amount of one withholding exemption by the number of exemptions claimed by the employee. 2. Subtract the amount determined in Step No. 1 from the employee's wages. Compare this net amount with the figure shown in the last column of the table above. Take the smaller of these two amounts and multiply it by 0.17. 3. Take the excess, if any, of the net amount found in Step No. 2 over the figure shown in the last column of the table above and multiply by 0.19. 4. Add the tax amounts determined in Steps Nos. 2 and 3. This is the amount of tax required to be withheld. This series of steps is necessary because Step No. 2 is for the purpose of the first surtax bracket; and Step No. 3, the second surtax bracket. The tax rates in each step give the employee full benefit of the 10-percent standard deduction for charitable contributions, etc., and the reduced surtax rates and 5-percent over-all tax reduction provided by the Revenue Act of 1945. Example.-An employee has a weekly pay-roll period, for which he is paid $80, and has in effect a withholding exemption certificate claiming three exemptions. His employer, using the percentage method, computes the tax to be withheld as follows: Step No. 1: Amount of one withholding exemption__ $11 Multiplied by number of exemptions claimed on Form W-4--- X3 (b) Amount shown in last column of table for weekly pay-roll $44 Balance shown in Step No. 2 (a)– Amount shown in last column of table for weekly pay-roll period___ $47 44 Where the withholding is computed for a "miscellaneous" pay-roll period, the wage and the amounts shown in the percentage method withholding table must be placed on a comparable basis. Thus the wage may be placed on a daily basis by dividing the total wage by the number of days in the period. After computation of the tax on a daily basis using the steps indicated above, the amount so found multiplied by the number of days in the period is the amount to be withheld. In the case of any employee who has no Withholding Exemption Certificate in effect, or an employee who has claimed no exemption, use no exemptions for purposes of Steps Nos. 1, 2, and 3. In determining the amount of tax to be deducted and withheld, the last digit of the wage amount may, at the election of the employer, be reduced to zero, or the wage amount may be computed to the nearst dollar. Thus, if the weekly wage is $37.43, the employer may eliminate the last digit and determine the tax on the basis of a wage payment of $37.40 or he may determine the tax on the basis of a wage payment of $37. H. R. 4790 HOW TO USE THE PERCENTAGE METHOD OF WITHHOLDING (This page may be disregarded by any employer using the wage-bracket tables) The percentage method involves several calculations. reference must be made to the following tables : Percentage method withholding table In using this method The steps in computing the tax to be withheld are summarized below: 1. Multiply the amount of one withholding exemption by the number of exemptions claimed by the employee. 2. Subtract the amount determined in Step No. 1 from the employee's wages. Compare this net amount with the figures shown in the next to last column of the table above. Take the smaller of these two amounts and multiply it by 0.12. 3. Take the excess, if any, of the net amount found in Step No. 2 over the figure shown in the next to last column of the table above and compare this excess with the figure shown in the last column of the table above. Take the smaller of these two amounts and multiply it by 0.18. 4. Take the excess, if any, of the net amount found in Step No. 3 over the figure shown in the last column of the table above and multiply it by 0.14. 5. Add the tax amounts determined in Steps Nos. 2, 3, and 4. This is the amount of tax required to be withheld. This series of steps is for the purpose of granting the tax reductions applying to incomes within the first surtax bracket. The exemption amounts and tax rates in each step give the employee full benefit of the 10-percent standard deduction for charitable contributions, etc., and the tax reduction provided by H. R. 4790. Example. An employee has a weekly pay-roll period, for which he is paid $80, and has in effect a withholding exemption certificate claiming three ex |