Example 6-4

Borden Company received a federal tax levy on John Kline. Kline is single, claims 2 personal allowances, and had a takehome pay of $621.00 this week. The amount of the tax levy (in 2019) would be:

Take-home pay	$621.00
Less: Exempt amount (from Figure 6.3).	396.16
Federal tax levy	$224.84

Figure 6.3 2019 Table for Amount Exempt for Tax Levy (Single Person)

Filing Status: Single
Pay Period	Number of Exemptions Claimed on Statement
	0	1	2	3	4	5	More Than 5
Daily	46.92	63.07	79.22	95.37	111.52	127.67	46.92 plus 16.15 for each dependent
Weekly	234.62	315.39	396.16	476.93	557.70	638.47	234.62 plus 80.77 for each dependent
Biweekly	469.23	630.77	792.31	953.85	1115.39	1276.93	469.23 plus 161.54 for each dependent
Semimonthly	508.33	683.33	858.33	1033.33	1208.33	1383.33	508.33 plus 175 for each dependent
Monthly	1016.67	1366.67	1716.67	2066.67	2416.67	2766.67	1016.67 plus 350 for each dependent

Source: Internal Revenue Service.

Carson Holiday has a federal tax levy of $4,119.90 against him. If Holiday is single with three personal exemptions and had a take-home pay of $1,020.00 this week, how much would his employer take from his pay to satisfy part of the tax levy?

Round your intermediate calculations and final answer to the nearest cent.

$

Feedback

Annually the IRS provides tables (see Figure 6.3) that shows the amount of the individuals' take-home pay that is exempt from the levy based on the filing status, the standard deduction, and the allowances claimed by the individual (W-4). The IRS instructs employers to withhold the difference between the take-home pay and the exempt amount. The take-home pay is the gross pay less taxes and the deductions in effect before the levy was received.