Question 1

Both the percentage method and the wage-bracket method of withholding have each of the following characteristics except

Accepted Answer

The answer of Both the percentage method and the wage-bracket...

Question 2

Wolf Company is giving a net bonus check of $500 to all of its employees. If each of the payments are subject to FIT (22% supplemental rate) and FICA taxes, but no state taxes, the gross amount of each bonus check would be

Accepted Answer

The gross amount of each bonus check would be $710.73. This is calculated by dividing the net bonus amount of $500 by 1 minus the combined FIT and FICA tax rate of 22%.

Question 3

A publisher is preparing information returns to report the royalties paid to authors (nonemployees) during the prior calendar year. The proper information return to be completed is

Accepted Answer

Royalties paid to nonemployee authors must be reported on Form 1099-MISC. Form W-2 is for reporting wages paid to employees, Form W-3 is a summary transmittal form for Forms W-2, Form 1099-DIV is for reporting dividend payments, and none of these forms are appropriate for reporting royalties paid to nonemployees.

Question 4

Ron Case, married with four dependents, failed to complete and file Form W-4 with his employer. The employer should

Accepted Answer

The answer of Ron Case, married with four dependents, failed...

Question 5

The withholding on vacation wage payments is

Accepted Answer

Vacation pay is taxed as though it were a regular payment for the periods occurring during the vacation period. This means that the amount of tax withholding on vacation pay depends on the employee's tax bracket and other factors that affect tax withholding on regular wages.

Question 6

Complete the following payroll register for employees of Corby Company for the week ended March 1, 20--. Taxable earnings should be computed on the basis of a 40-hour week with overtime earnings being paid at time and one-half for all hours over 40 each workweek (no overtime for salaried employees). 
Note:   Carry each overtime hourly rate out to 3 decimal places and then round off to 2 decimal places. 
All employees' wages are subject to the OASDI tax of 6.2% and the HI tax of 1.45%.  The supplemental HI rate of 0.9% is not applicable. 
Use the partial wage-bracket tables provided to determine the amount of federal income tax to be withheld. For the salaried employees (#32 and #10), use the percentage method table. 
All workers are employed in a state that imposes a 2% income tax on the gross wages earned by each worker.   
   Amount of One Withholding Allowance Weekly $80.80 
           Percentage Method Tables for Income Tax Withholding  
Source: Internal Revenue Service

Accepted Answer

The answer of Complete the following payroll register for employees...

Question 7

Which of the following forms is not completed by the employer?

Accepted Answer

The W-4 form is completed by employees to indicate their tax withholdings to their employer, not by the employer. All other forms listed are completed by the employer for various reporting purposes.

Question 8

Employers must submit Forms W-4 to the IRS for

Accepted Answer

The answer of Employers must submit Forms W-4 to the...

Quiz 4: Income Tax Withholding