How do you determine how much to deduct from a paycheck?

How much federal tax is deducted is determined by how many withholding allowances you select on Form W-4. Ask your employer's HR or payroll department for a Form W-4, fill it out, and return it to them.

How do you select the number of allowances?

There are many calculators on the net that are designed to help you. The IRS has a calculator here:

http://www.irs.gov/individuals/article/0,,id=96196,00.html

Your state may have a similar form for state income taxes.

After you choose the number of withholding allowances, you can see how much tax will be deducted from each paycheck by using the following calculator:

http://www.paycheckcity.com/NetPayCalc/netpaycalculator.asp

Do a "sanity check" on the amounts that are subtracted from your (and your spouse's if filing jointly) paychecks and make sure the amounts are roughly what you expect to owe in taxes at the end of the year. You should end up neither getting a refund nor owing the government more than $1000. If you are getting a refund, you can have a little less tax deducted by increasing the number of withholding allowances. If you are paying too much at the end of the year, you can have a little more tax deducted by decreasing the number of withholding allowances.