50. LO.5 Jane, who is expecting to finish college in May 2013, is fortunate to have already arranged full-time employment after graduation. She will begin work on July 1, 2013, as a staff accountant at a nearby professional services firm with a starting salary of $48,600 per year. Jane is married to Craig, who plans to be a full-time student throughout the year. They anticipate generating no income for the year other than the salary from her new position.

a. How many withholding allowances would you expect Jane to claim on her Form W–4?

b. Assuming that Jane receives her salary on a monthly basis, what amount will be withheld if her employer uses the wage-bracket tables to calculate withholdings?

c. Assuming that Jane receives her salary on a monthly basis, what amount will be withheld if her employer uses the percentage method to calculate withholdings?

d. Assuming that Jane and Craig use the standard deduction, calculate the Federal income tax liability on their projected taxable income for 2013. What changes would you recommend Jane make to her W–4 to correct any over- or under-withholding for the current year?

e. What further changes should she make to her W–4 at the beginning of 2014?