Deck 10: Payroll Taxes

Question 1

The federal income and social security taxes reported on a W-2 form are the amounts used to determine if a taxpayer will receive a refund on a Form 1040.

Answer 1

False

Question 2

Only wages paid in cash are subject to federal withholding.

Answer 2

False

Question 3

The more exemptions claimed,the more tax that is withheld and the smaller the net check.

Answer 3

False

Question 4

Payroll tax deposits are made to any authorized financial depository or through an electronic funds transfer payment system.

Question 5

The withholding tables are structured so that employers withhold approximately the same amount for a given annual income regardless of how often the employee is paid.

Question 6

Employers are not required to withhold any federal taxes on allocated tips.

Question 7

Starting in 2014,the credit against "payroll taxes" for providing COBRA premium assistance to eligible individuals is recorded using Form 941-X.

Question 8

The amount of federal income taxes withheld should approximate the tax liability the employee will owe to the federal government.

Question 9

Employers withhold income tax only on tips claimed by employees who are tipped.

Question 10

The payroll tax withholding system was established to help fund governmental operations.

Question 11

Employees typically receive a paycheck on a weekly,biweekly,semimonthly or monthly basis.

Question 12

For semiweekly schedule depositors,taxes withheld from payrolls paid during the week are due to be remitted within three banking days after the date wages are paid.

Question 13

Form W-4 is used by employees to indicate the filing status and number of withholding allowances claimed on Form 1040.

Question 14

Employers with a payroll tax liability of less than $2,500 at the end of a quarter can pay the payroll tax liability at the end of the next month following the quarter with Form 941.

Question 15

FICA taxes are collected equally from the employee and the employer.

Question 16

New employers are always considered to be monthly schedule depositors regardless of the amount of their federal tax liability during their first year.

Question 17

A taxpayer pays 6.2% of taxable wages for both social security and Medicare taxes.

Question 18

Form 941 is a quarterly reconciliation report an employer sends to the IRS showing all federal payroll tax liability and payments for the period.

Question 19

Self-employed taxpayers who also receive wages from an employer are not subject to FICA or federal withholding taxes.

Question 20

In the lookback period,if the employer reported total payroll taxes of more than $50,000,the employer is a semiweekly schedule depositor.

Question 21

When using the wage bracket method,withholding allowances are deducted before figuring the federal withholding amount.

Question 22

Generally,an employer must withhold 28% of certain taxable payments if the payee fails to furnish the employer with a correct taxpayer identification number.

Question 23

The amount withheld from supplemental payments depends on whether the employer accounts for the payment separate from regular wages.

Question 24

Taxpayers who employ household workers must file a quarterly 941 return and an annual 940 return.

Question 25

Unemployment tax payments are made by federal and state governmental agencies directly to the taxpayer who is unemployed.

Question 26

When calculating self-employment taxes from a taxpayer who also receives wages from a salaried job,the earnings from self-employment are considered first in calculating the ceiling amount for social security and Medicare.

Question 27

Form 4070 is used by employers to record employees' tips subject to tax withholding and FICA taxes.

Question 28

Copy A of the Form W-2 is a red scannable form that is sent directly to the Internal Revenue Service to track all wages for federal income tax and social security purposes.

Question 29

An employee who works for multiple employers will likely be under-withheld for federal income tax purposes and can owe additional taxes when filing his/her return.

Question 30

Form 1040-ES is filed along with the Form 1040 when a taxpayer makes estimated payments during the year.

Question 31

Although the federal unemployment tax is 6.0% of covered wages,employers receive a 5.4% federal credit if they make accurate and timely state unemployment tax deposits.

Question 32

A taxpayer who has overpaid the social security portion of the FICA tax because his or her combined taxable income from multiple jobs exceeds the annual wage base is entitled to receive the excess as a refund even if there is federal tax owed on the 1040 return.

Question 33

Wages subject to withholding and other employment taxes include all pay given to employees for services performed.

Question 34

An employer who is a monthly schedule depositor and accumulates a $100,000 tax liability on any day must pay the tax on the next business day and is allowed by law to remain a monthly schedule depositor until the next year when the employer will become a semiweekly schedule depositor.

Question 35

Employers must prepare and send to employees the multi-part W-3 no later than January 31 of the following year.

Question 36

Schedule H is completed by the household worker and remitted with his/her Form 1040.

Question 37

Supplemental wages are only subject to FICA taxes and federal withholding taxes and are not subject to SUTA or FUTA taxes.

Question 38

When calculating the FUTA tax due,an employer can qualify for a 5.4% maximum credit for state unemployment taxes paid.

Question 39

Safe harbor is a term used to describe a provision in the Internal Revenue Code that protects taxpayers from penalty under certain situations.

Question 40

Household workers are subject to FUTA tax only if cash wages of $1,400 or more are paid in any calendar quarter during the prior and/or current year.

Question 41

In a large food or beverage establishment,on what form or schedule is any tip shortfall from a directly tipped employee recorded?

A) Form 4070.
B) Form 8027.
C) Form 8109.
D) Schedule

Question 42

Mahmet earned wages of $118,650 during 2014.He is single and claims two withholding allowances.How much will Mahmet's employer withhold in Medicare taxes for the year?

A) $1,696.50.
B) $1,696.60.
C) $1,703.43.
D) $1,720.43.

Question 43

Mahmet earned wages of $118,650 during 2014.He is single and claims two withholding allowances.How much FICA tax is Mahmet's employer responsible to remit in 2014?

A) $17,901.00.
B) $17,948.86.
C) $18,105.60.
D) $18,153.45.

Question 44

Which of the following conditions requires an employer to use the electronic deposit requirement?

A) Employer made more than $100,000 in total tax deposits in 2013.
B) Employer made more than $100,000 in total tax deposits in 2014.
C) All employers are required to use the electronic funds transfer.
D) Employer made more than $200,000 in total tax deposits in 2013.

Question 45

Employees claim withholding allowances on Form W-4.For each withholding allowance claimed,their withholding base is reduced by what amount for calendar year 2014?

A) $3,800.
B) $3,850.
C) $3,900.
D) $3,950.

Question 46

Bubba earned a total of $221,100 for 2014.How much FICA tax is his employer required to withhold from Bubba's paychecks for the year?

A) $9,140.40.
B) $10,459.95.
C) $10,647.50.
D) $10,649.85.

Question 47

Sergio is single,is paid $2,400 per week,and claims one withholding allowance.What is the amount of federal income tax withheld from Sergio's gross wages for the week using the percentage method? (Round your answer two decimal places)

A) $490.50.
B) $507.36.
C) $507.64.
D) $528.64.

Question 48

Ladaris has two jobs.She earned $118,000 from her first job and $10,000 from her second job.How much total FICA taxes will Ladaris have withheld from her wages from working two jobs?

A) $8,965.00.
B) $9,110.00.
C) $9,730.00.
D) $9,792.00.

Question 49

Danita is married and is paid $4,350 biweekly.She claims three withholding allowances.What amount of federal income tax will be withheld from Danita's gross wages for each payroll period? (Round your answer two decimal places)

A) $530.75.
B) $564.10.
C) $573.63.
D) $687.55.

Question 50

Marci has two jobs and both employers withheld FICA tax.From her first job,she earned $99,600 and from her second job she earned $18,300.How much can Marci claim on her Form 1040 as excess social security tax paid in 2014?

A) $0.
B) $55.80.
C) $58.80.
D) $64.80.

Question 51

If on any day during the month,an employer accumulates $100,000 or more in tax liability,the taxes must be deposited:

A) Before the close of the business day on which the liability occurs.
B) By the last day of the month if the employer is a monthly schedule depositor.
C) By either the following Wednesday or Friday if the employer is a semiweekly schedule depositor.
D) By the next banking day.

Question 52

Unless specifically excluded,what is the penalty for sending a required tax payment directly to the Internal Revenue Service?

A) 2%.
B) 5%.
C) 10%.
D) 15%.

Question 53

Mahmet earned wages of $118,650 during 2014.He is single and claims two withholding allowances.How much will Mahmet's employer withhold in social security taxes for the year?

A) $7,254.00.
B) $7,356.30.
C) $8,950.50.
D) $9,076.73.

Question 54

Eva earned $89 in tips in March.When must she inform her employer of her tips on Form 4070 for federal income tax and FICA withholding purposes?

A) April 10.
B) April 30.
C) March 31.
D) Tips are not subject to payroll taxes if less than $90 in any one month.

Question 55

Employers are required to deposit FUTA taxes when their liability for a quarter exceeds:

A) $500.
B) $1,000.
C) $1,500.
D) $2,500.

Question 56

Form 941 is prepared by the employer on a quarterly basis to record all of the following payroll taxes except:

A) FUTA.
B) Social security tax.
C) Medicare tax.
D) Federal withholding tax.

Question 57

The Anderson Company started its business on August 2,2014.On August 15^th,it paid wages for the first time and accumulated a tax liability of $47,000.On August 29,it incurred an additional tax liability of $53,000.How is the Anderson Company treated as a payroll tax depositor?

A) Monthly because its accumulated tax liability is not more than $100,000 on any one day.
B) Monthly because new companies do not have a lookback period.
C) Semiweekly because its accumulated tax liability is $100,000 for the month.
D) Semiweekly for this pay period only and then monthly for the remainder of the year.

Question 58

The payroll period for a semiweekly schedule depositor ends on and is paid on Friday,July 11,2014.The employer must deposit the federal taxes withheld for this pay period on or before:

A) The following Monday.
B) The following Wednesday.
C) The following Friday.
D) The last day of the month.

Question 59

Arlene is a college professor earning $90,000 and also has a sole proprietor consulting practice where she earned $28,000 for 2014.How much of her total earnings are subject to self-employment tax for 2014?

A) $25,588.
B) $25,858.
C) $27,000.
D) $28,000.

Question 60

Employers with a payroll tax liability of less than $2,500 at the end of any quarter pay their tax liability:

A) Directly to the authorized depository after the end of the quarter when Form 941 is filed.
B) Directly to the authorized depository on the same day the Form 941 is mailed.
C) Directly only if they use the EFTPS form of payment before Form 941 is filed.
D) Directly to the Internal Revenue Service when they file Form 941.

Question 61

Juan is married,is paid 2,000 per week,and claims three withholding allowances.What is the amount of federal income tax withheld from Juan's gross wages for the week using the percentage method?

A) $223.90.
B) $242.90.
C) $261.90.
D) $299.90.

Question 62

Goshen works part-time for PCN,Inc.and earned $6,400.He also works part-time for QDO,Inc.and earned $7,300 for 2014.How much FUTA tax are his employers required to remit to the IRS? Assume the employer receives the maximum credit for state unemployment taxes and Goshen started on September 1,2014.

A) $42.00.
B) $80.40.
C) $83.08.
D) $107.20.

Question 63

Irene earned wages of $118,200 during 2014.How much will Irene's employer withhold in social security taxes for the year?

A) $7,020.00.
B) $7,092.00.
C) $7,254.00.
D) $7,328.40.

Question 64

Jean received a commission of $7,000 from her employer.How is the federal withholding tax on this payment calculated if she also earns semimonthly wages of $3,500?

A) If taxes have already been withheld from Jean's wages separately,the commission is added to the wages and federal taxes are withheld on this combined amount.Any excess taxes withheld this pay period will be refunded to Jean on her next paycheck.
B) If taxes have already been withheld from Jean's wages,the commission is taxed at a flat rate of 25%.
C) If taxes have already been withheld from Jean's regular wages,the commission is added to the wages and the entire amount is subject to withholding at a rate of 25%.
D) If taxes have already been withheld from Jean's wages separately,the commission is subject to backup withholding of 28%.

Question 65

Supplemental wages are subject to the following taxes:

A) FICA taxes.
B) Federal withholding taxes.
C) Unemployment taxes.
D) All of these.

Question 66

For wages paid in 2014,an employer must send Copy A of each Form W-2 along with the W-3 transmittal form to the SSA no later than:

A) January 31,2015.
B) February 1,2015.
C) February 28,2015.
D) March 1,2015.

Question 67

Supplemental wage payments include all of the following except:

A) Commissions.
B) Bonuses.
C) Expenses paid under an accountable plan.
D) Taxable fringe benefits.

Question 68

If a taxpayer works for two separate employers,how much in FUTA taxes is each employer responsible to remit in the name of the taxpayer?

A) Only the first employer is required to remit FUTA taxes on the wages earned from the first job.
B) Both employers must remit FUTA taxes on the first $7,000 in wages they pay to the taxpayer.
C) The first employer remits 5.4% on the first $7,000 in wages while the second employer remits only .6% on the first $7,000 in wages to equal the 6.0% rate.
D) The first employer remits FUTA tax on the first $7,000 in wages and the second employer remits FUTA tax on the next $7,000 in wages.

Question 69

Shanita is a self-employed event planner.She has net earnings (profit)from her business of $63,220.Her self-employment taxes for the year are: (Round your answer two decimal places)

A) $8,923.70.
B) $8,932.70.
C) $9,639.00.
D) $9,672.66.

Question 70

The penalty for filing W-2s containing mismatched names and social security numbers is:

A) $15 per return.
B) $30 per return.
C) $50 per form.
D) $100 per return.

Question 71

Irene earned wages of $118,200 during 2014.How much will Irene's employer withhold in Medicare taxes for the year?

A) $1,654.80.
B) $1,713.90.
C) $1,773.00.
D) $1,820.28.

Question 72

What form is given to an employee to correct incorrect payroll information?

A) W-2C.
B) W-4.
C) W-9.
D) None.The employee notifies the IRS directly when he or she files a Form 1040.

Question 73

An employer with 250 or more employees uses which form to file W-2s electronically?

A) Form 8109-B.
B) Form 4419.
C) Form 4070.
D) Form 1040-ES.

Question 74

On January 3,2014,Norman employed a part-time household worker in his home.He paid the household worker $400 per month for 2014.What amount of FICA taxes is Norman required to record on Schedule H?

A) $0.
B) $542.40.
C) $589.56.
D) $734.40.

Question 75

A payer must request from any U.S.person (or resident alien)that he or she complete Form W-9 to certify that all of the following are true except:

A) The taxpayer identification number is correct.
B) The taxpayer is subject to backup withholding.
C) The taxpayer is exempt from backup withholding if a U.S.exempt payee.
D) The taxpayer is not subject to backup withholding.

Question 76

Irene earned wages of $118,200 during 2014.What share of FICA tax is Irene's employer responsible for in 2014?

A) $8,950.50.
B) $8,967.90.
C) $9,024.50.
D) $9,042.30.

Question 77

Sharon is single and is paid $3,782 biweekly and claims one withholding allowance.What amount of federal income tax will be withheld from Sharon's gross wages for each payroll period?

A) $504.40.
B) $507.58.
C) $726.08.
D) $729.64.

Question 78

A taxpayer with an AGI of $157,350 for 2014 pays estimated taxes.The taxpayer can avoid an underpayment penalty by paying:

A) At least 90% of the 2014 tax liability ratably over four quarterly payments.
B) At least 100% of the 2014 tax liability ratably over four quarterly payments.
C) At least 100% of the 2013 tax liability ratably over four quarterly payments.
D) At least 90% of the 2013 tax liability if 2013 adjusted gross income was less than $100,000,regardless of filing status.

Question 79

Failure to furnish a correct TIN to a requester (payer)can result in a penalty to the payee of:

A) $0,it is the responsibility of the payer (requester)to have the correct information.
B) $50 for each failure to complete the W-9.
C) $500 maximum for failure to complete any W-9 forms as required.
D) $0,but the taxpayer can be subject to fines and/or imprisonment if caught by an IRS agent.

Question 80

Household employees are subject to FICA withholding if they are paid at least what amount during 2014?

A) $1,600.
B) $1,700.
C) $1,800.
D) $1,900.