Question 1

Mark the correct answer. Self-employment taxes:

Accepted Answer

Self-employment taxes consist of a Medicare tax and a Social Security tax.

Question 2

In 2015, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The third employee worked only part-time and earned $4,000. The employer timely paid state unemployment tax equal to 5.4 percent of each employee's wages up to $7,000. How much FUTA tax is due from Willow Corporation for 2015, after the credit for state unemployment taxes?

Accepted Answer

The answer of In 2015, Willow Corporation had three employees....

Question 3

George has four employees who earned $75,000, $27,000, $2,100, and $6,200 during 2015, respectively. He paid 5.4 percent for state unemployment tax. How much FUTA tax will George owe for the four employees?

Accepted Answer

FUTA tax is 0.6 percent of the first $7,000 of wages paid to each employee. George's four employees earned a total of $75,000 + $27,000 + $2,100 + $6,200 = $110,300. The first $7,000 of wages paid to each employee is subject to FUTA tax, so the total amount of wages subject to FUTA tax is $7,000 x 4 = $28,000. The FUTA tax rate is 0.6 percent, so George's FUTA tax liability is $28,000 x 0.006 = $168.

Question 4

The FUTA tax for 2015 is based on 6.2 percent of each employee's wages up to $10,000.

Accepted Answer

The FUTA tax rate for 2015 was 6.0% on the first $7,000 of each employee's wages, not 6.2% on $10,000.

Question 5

The FUTA tax is paid by:

Accepted Answer

The FUTA tax, also known as Federal Unemployment Tax, is an employer-only tax that is paid to the federal government. It is based on a percentage of the first $7,000 of each employee's wages and is used to fund the federal Unemployment Insurance (UI) program, which provides temporary financial assistance benefits to eligible workers who have lost their jobs through no fault of their own.

Question 6

Sally is an employer with one employee, Sara. Sara earned $12,000 from January 1, 2015 through June 30, 2015, and the state unemployment tax rate is 5.4 percent. Calculate the following amount for Sally.
a.FUTA tax after the state tax credit
b.What form should Sally use to report her FUTA tax liability for 2015?

Accepted Answer

The answer of Sally is an employer with one employee,...

Question 7

Oliver has two employees who earned the following amounts during 2015: If Oliver timely pays 5.4 percent for state unemployment tax, what is the amount of his 2015 FUTA after the state tax credit?

Accepted Answer

The answer of Oliver has two employees who earned the...

Question 8

For purposes of the new additional 0.9% Medicare surtax on earned income, a single taxpayer having earned income of more than $200,000 is generally subject to the tax.

Accepted Answer

A single taxpayer with earned income of more than $200,000 is subject to the additional 0.9% Medicare surtax.

Question 9

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations. In which situation would this not be required?

Accepted Answer

According to current tax laws, if a domestic employee, such as a baby-sitter, earns less than $2,200 in a year, the employer is not required to pay Social Security and Medicare taxes. Therefore, the taxpayer would not have to pay these taxes for the baby-sitter who earns $1,300 a year.

Question 10

The FUTA tax is a voluntary unemployment tax which an employer may or may not wish to contribute towards.

Accepted Answer

The FUTA tax is not voluntary. Employers are required by law to contribute to this tax, which provides funds for unemployment benefits.

Question 11

Tom had net earnings of $80,000 from the plant nursery he owns. What is his liability for FICA taxes on his earnings?

Accepted Answer

The answer of Tom had net earnings of $80,000 from...

Question 12

Emily is a self-employed attorney.
a.​
Assuming that Emily earns $20,000 from her practice, calculate the total amount of her self-employment tax liability for 2015.
b.​
Assuming that Emily earns $135,000 from her practice, calculate the total amount of her self-employment tax liability for 2015.

Accepted Answer

The answer of Emily is a self-employed attorney.
a.​
Assuming that Emily...

Question 13

Household employers are not required to pay FICA taxes on cash payments of less than $1,900 paid to any household employee in a calendar year.

Accepted Answer

Household employers are not required to pay FICA taxes on cash payments of less than $1,900 paid to any household employee in a calendar year according to the IRS.

Question 14

Melody and Todd are married and have employee wages of $250,000 each in 2015. They have no other income. How much additional 0.9% Medicare surtax will Melody and Todd have to pay or receive as a refund when they file their 2015 income tax return? ​

Accepted Answer

Melody and Todd's combined wages amount to $500,000. The Medicare surtax is 0.9% on any wages above $250,000 for married couples filing jointly. Therefore, they will owe an additional 0.9% on the $250,000 in wages above the threshold, which is $2,250 ($250,000 - $250,000 = $0 x 0.9% = $0; $500,000 - $250,000 = $250,000 x 0.9% = $2,250). Therefore, $1,125 will be owed by each spouse, for a total additional amount due of $2,250. This amount will be due with their tax return in addition to any amounts that were already withheld from their paychecks.

Question 15

In 2015, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The third employee worked only part-time and earned $4,000. The employer timely paid state unemployment tax equal to 5.4 percent of each employee's wages up to $7,000. How much unemployment tax was paid to the state from Willow Corporation for 2015?

Accepted Answer

The first two employees each earned salaries of $25,000, which means $7,000 of each salary is subject to the state unemployment tax.

So for each of the full-time employees:

$7,000 x 0.054 = $378

For the part-time employee:

$4,000 x 0.054 = $216

There were three employees total, so the total unemployment tax paid by the employer would be:

($378 x 2) + $216 = $972

The correct answer is (D) $972.

Question 16

Household employers are not required to pay FICA taxes on part-time household employees.

Accepted Answer

Household employers are required to pay FICA taxes if they pay their employee more than $2,200 in a year, regardless of whether the employee is full-time or part-time.

Question 17

A credit against the FUTA tax is available for state unemployment tax paid by the employer.

Accepted Answer

The credit against the Federal Unemployment Tax Act (FUTA) tax is available for state unemployment tax paid by the employer, up to a maximum of 5.4% of the first $7,000 of wages paid to each employee. This credit is intended to offset the cost of state unemployment insurance programs and reduce the employer's federal tax liability.

Question 18

The Wash Your Paws Self-Service Dog Wash, a California business, had two employees during the year. Lindsey worked from January through March 15 and earned $2,750. Avery worked for the whole year and earned $20,000. The State of California assesses unemployment tax at the rate of 5.4 percent. Calculate the total FUTA tax after the credit for the state unemployment tax.

Accepted Answer

The answer of The Wash Your Paws Self-Service Dog Wash,...

Question 19

Lucinda is a self-employed veterinarian in 2015. Her Schedule C net earnings are $86,000 for the year. Calculate the total amount of Lucinda's self-employment tax liability for 2015.

Accepted Answer

The answer of Lucinda is a self-employed veterinarian in 2015....

Question 20

Which of the following types of income is subject to the self-employment tax?

Accepted Answer

Income from a sole proprietor's law practice is subject to the self-employment tax. The self-employment tax is a tax on net earnings from self-employment, which includes earnings from a sole proprietorship. Interest income, gain on sale of real estate, and dividends from stock are not subject to self-employment tax.

Quiz 9: Withholding, Estimated Payments, and Payroll Taxes

Mark the correct answer. Self-employment taxes:

George has four employees who earned $75,000, $27,000, $2,100, and $6,200 during 2015, respectively. He paid 5.4 percent for state unemployment tax. How much FUTA tax will George owe for the four employees?

The FUTA tax for 2015 is based on 6.2 percent of each employee's wages up to $10,000.

The FUTA tax is paid by:

Oliver has two employees who earned the following amounts during 2015: If Oliver timely pays 5.4 percent for state unemployment tax, what is the amount of his 2015 FUTA after the state tax credit?

For purposes of the new additional 0.9% Medicare surtax on earned income, a single taxpayer having earned income of more than $200,000 is generally subject to the tax.

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations. In which situation would this not be required?

The FUTA tax is a voluntary unemployment tax which an employer may or may not wish to contribute towards.

Tom had net earnings of $80,000 from the plant nursery he owns. What is his liability for FICA taxes on his earnings?

Emily is a self-employed attorney. a. Assuming that Emily earns $20,000 from her practice, calculate the total amount of her self-employment tax liability for 2015. b. Assuming that Emily earns $135,000 from her practice, calculate the total amount of her self-employment tax liability for 2015.

Household employers are not required to pay FICA taxes on cash payments of less than $1,900 paid to any household employee in a calendar year.

Melody and Todd are married and have employee wages of $250,000 each in 2015. They have no other income. How much additional 0.9% Medicare surtax will Melody and Todd have to pay or receive as a refund when they file their 2015 income tax return?

Household employers are not required to pay FICA taxes on part-time household employees.

A credit against the FUTA tax is available for state unemployment tax paid by the employer.

Lucinda is a self-employed veterinarian in 2015. Her Schedule C net earnings are $86,000 for the year. Calculate the total amount of Lucinda's self-employment tax liability for 2015.

Which of the following types of income is subject to the self-employment tax?

Quiz 9: Withholding, Estimated Payments, and Payroll Taxes

Mark the correct answer. Self-employment taxes:

George has four employees who earned $75,000, $27,000, $2,100, and $6,200 during 2015, respectively. He paid 5.4 percent for state unemployment tax. How much FUTA tax will George owe for the four employees?

The FUTA tax for 2015 is based on 6.2 percent of each employee's wages up to $10,000.

The FUTA tax is paid by:

Oliver has two employees who earned the following amounts during 2015: If Oliver timely pays 5.4 percent for state unemployment tax, what is the amount of his 2015 FUTA after the state tax credit?

For purposes of the new additional 0.9% Medicare surtax on earned income, a single taxpayer having earned income of more than $200,000 is generally subject to the tax.

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations. In which situation would this not be required?

The FUTA tax is a voluntary unemployment tax which an employer may or may not wish to contribute towards.

Tom had net earnings of $80,000 from the plant nursery he owns. What is his liability for FICA taxes on his earnings?

Household employers are not required to pay FICA taxes on cash payments of less than $1,900 paid to any household employee in a calendar year.

Melody and Todd are married and have employee wages of $250,000 each in 2015. They have no other income. How much additional 0.9% Medicare surtax will Melody and Todd have to pay or receive as a refund when they file their 2015 income tax return? ​

Household employers are not required to pay FICA taxes on part-time household employees.

A credit against the FUTA tax is available for state unemployment tax paid by the employer.

Lucinda is a self-employed veterinarian in 2015. Her Schedule C net earnings are $86,000 for the year. Calculate the total amount of Lucinda's self-employment tax liability for 2015.

Which of the following types of income is subject to the self-employment tax?

Melody and Todd are married and have employee wages of $250,000 each in 2015. They have no other income. How much additional 0.9% Medicare surtax will Melody and Todd have to pay or receive as a refund when they file their 2015 income tax return?