Case Study

Bob is married, and his spouse is employed part-time making less than $1,000 per year. They have three dependents. Bob just started a new job and needs to complete his W-4. Using this information, answer the questions below.

Questions

1. Explain the types of withholding allowances Bob may claim for income tax purposes and the purpose of the W-4 form.
2. Under what conditions would Bob be exempt from withholding of federal income taxes in 2016?
3. How would Bob indicate a no-tax-liability status if he qualifies for exemption?