Looking at her paycheck, Rhonda notices that $30.56 was withheld from her last paycheck for state income tax while $122.25 was withheld for federal income tax. She knows that she indicated on her employment paperwork to set her state withholding at 21% of the federal withholding. What should Rhonda be thinking?
Answer
A
The state withholding is correct, the correct amount is being withheld.
B
The state withholding is too low, too little is being withheld.
C
The state withholding is too high, too much is being withheld.
D
She should not have any money withheld by the state since she is having federal taxes withheld.
Explanation
Rhonda expected state withholding to be 21% of her federal withholding. Calculate 0.21 × $122.25 = about $25.67. Since $30.56 was withheld for state tax, more was taken out than she expected, so the state withholding is too high.
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