Asked by rae

Use the tax table below to answer the following question.
A 9-column table with 7 rows is shown. Column 1 is labeled If the wages are at least with entries 720, 740, 760, 780, 800, 820, 840. Column 2 is labeled But less than with entries 740, 760, 780, 800, 820, 840, 860. Column 3 is labeled And the number of withholding allowances is 0, the amount of income tax withheld is, with entries 80, 83, 86, 89, 92, 95, 98. Column 4 is labeled And the number of withholding allowances is 1, the amount of income tax withheld is, with entries 62, 65, 68, 71, 74, 77, 80. Column 5 is labeled And the number of withholding allowances is 2, the amount of income tax withheld is, with entries 44, 47, 50, 53, 56, 59, 62. Column 6 is labeled And the number of withholding allowances is 3, the amount of income tax withheld is, with entries 26, 28, 31, 34, 37, 40, 43. Column 7 is labeled And the number of withholding allowances is 4, the amount of income tax withheld is, with entries 14, 16, 18, 20, 22, 24, 26. Column 8 is labeled And the number of withholding allowances is 5, the amount of income tax withheld is, with entries 1, 3, 5, 7, 9, 11, 13. Column 9 is labeled And the number of withholding allowances is 6, the amount of income tax withheld is, with entries 0, 0, 0, 0, 0, 0, 1.
Consider cases where the number of withholding allowances is less than 6. Which will cause the amount of federal income tax withheld to increase?
a.
Gross pay stays the same and withholding allowances increase.
b.
Gross pay increases by more than $20 and withholding allowances stay the same.
c.
Gross pay increases by more than $20 and withholding allowances increase.
d.
Gross pay decreases by more than $20 and withholding allowances stay the same.

All Answers 1

Answered by GPT-5 mini AI
Answer: b.

Reason: For any fixed number of withholding allowances (<6), moving up at least one $20 wage bracket raises the tax amount in the table. Increasing withholding allowances (with pay fixed) lowers the tax, and doing both (raise pay and raise allowances) can cancel or reverse, so only (b) always produces an increase.