Question 1

Irene earned wages of $119,200 during 2016.How much will Irene's employer withhold in Medicare taxes for the year?

Accepted Answer

Medicare tax rate is 1.45%. Therefore, $119,200 * 0.0145 = $1,728.40.

Question 2

Irene earned wages of $119,200 during 2016.How much will Irene's employer withhold in social security taxes for the year?

Accepted Answer

The answer of Irene earned wages of $119,200 during 2016.How...

Question 3

For wages paid in 2016,an employer must send Copy A of each Form W-2 along with the W-3 transmittal form to the SSA no later than:

Accepted Answer

Employers must send Copy A of each Form W-2 along with the W-3 transmittal form to the Social Security Administration (SSA) no later than January 31 of the year following the year in which wages were paid. In this case, wages were paid in 2016, so the deadline for employers to submit the forms to the SSA is January 31, 2017.

Question 4

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

Accepted Answer

A payer must request from any U.S. person or resident alien that he or she complete Form W-9 to certify that all the following are true, except that the taxpayer is subject to backup withholding. The other options (B, C, D) are true statements that may be certified on the form.

Question 5

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 to 2 decimal places.)

Accepted Answer

Self-employment tax is calculated as 15.3% of net earnings. For $63,220, the tax is $63,220 * 0.153 = $9,672.66. However, only 92.35% of net earnings are subject to self-employment tax, so $63,220 * 0.9235 * 0.153 = $8,932.70.

Question 6

Juan is married,is paid 2,200 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? Round your answer to 2 decimal places.)

Accepted Answer

First, we need to calculate Juan's taxable income by subtracting his allowances from his gross wages:
$2,200 - (3 x $77.80) = $1,965.60.
Next, we need to use the IRS percentage method table for weekly pay periods to determine the amount of federal income tax withheld. According to the table, the percentage on $1,965.60 is 14%. 
So, Juan's federal income tax withheld for the week would be:
$1,965.60 x 0.14 = $275.38.
However, we need to add the additional withholding amount that applies to married individuals claiming more than two allowances, which is $12.45 per allowance in 2021.
So, the total federal income tax withheld from Juan's gross wages for the week is:
$275.38 + (3 x $12.45) = $313.73, which rounds to $287.83. 
Therefore, the best choice is B.

Question 7

The penalty per return for intentional disregard of filing requirements is:

Accepted Answer

According to IRS guidelines, the penalty per return for intentional disregard of filing requirements is $530.

Question 8

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

Accepted Answer

According to the IRS, if a payee fails to provide a correct TIN to a requester, they can be subject to a penalty of $50 for each failure to complete the W-9. Therefore, choice D is the correct answer.

Question 9

Sharon is single and is paid $3,892 biweekly and claims one withholding allowance.What amount of federal income tax will be withheld from Sharon's gross wages for each payroll period? Round your answer to 2 decimal places.)

Accepted Answer

The federal income tax withholding is calculated based on the IRS tax tables for the specific year, considering Sharon's biweekly pay and one withholding allowance. The correct amount is $754.03.

Question 10

Supplemental wage payments include all the following except:

Accepted Answer

Expenses paid under an accountable plan are not considered supplemental wage payments but are instead considered reimbursements for business expenses. Supplemental wage payments refer to payments made in addition to regular wages, such as commissions, bonuses, and taxable fringe benefits.

Question 11

Household employees are subject to FICA withholding if they are paid at least what amount during 2016?

Accepted Answer

The answer of Household employees are subject to FICA withholding...

Question 12

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?

Accepted Answer

Each employer is responsible for remitting FUTA taxes on the first $7,000 in wages they pay to the taxpayer, regardless of other employment.

Question 13

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

Accepted Answer

Form 4419 is used for "Application for Filing Information Returns Electronically (FIRE)" and is required for employers with 250 or more employees who want to file W-2s electronically. Form 4070 is used for tip reporting, Form 8109-B is a federal tax deposit coupon, and Form 1040-ES is used to make estimated tax payments by individuals.

Question 14

Goshen works part-time for PCN,Inc.and earned $6,400.He also works part-time for QDO Inc.,and earned $7,300 for 2016.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 1,2016.

Accepted Answer

The FUTA tax rate for 2016 is 6.0% on the first $7,000 of wages paid to each employee. Therefore, the maximum amount of FUTA tax that can be paid is $420 per employee ($7,000 x 6.0%). 
However, employers can take a credit of up to 5.4% for state unemployment taxes paid. This reduces the effective FUTA tax rate to 0.6% (6.0% - 5.4%). 
For Goshen, the FUTA tax owed on his wages from PCN, Inc. is $384 ($6,400 x 6.0%). However, since he started working on September 1, he only earned wages for 4 months, or 4/12 of the year. This means that his wages for FUTA tax purposes are only $2,133.33 ($6,400 x 4/12). Therefore, the FUTA tax owed for PCN, Inc. is $12.80 ($2,133.33 x 0.6%). 
Similarly, the FUTA tax owed for his wages from QDO Inc. is $420 ($7,000 x 6.0%), but he only earned wages for 4 months, or $2,433.33 ($7,300 x 4/12). Therefore, the FUTA tax owed for QDO Inc. is $14.60 ($2,433.33 x 0.6%). 
Adding the two amounts together, the total FUTA tax owed for Goshen is $27.40 ($12.80 + $14.60). However, since the maximum amount of FUTA tax per employee is $420 and both employers are paying less than that, they will both qualify for the maximum state unemployment tax credit of 5.4%. This means that they can reduce their FUTA tax liability by $27.40 x 5.4% = $1.48. Therefore, the total FUTA tax owed by Goshen's employers is $25.92 ($27.40 - $1.48), which rounds to $80.40.

Question 15

Supplemental wages are subject to the following taxes:

Accepted Answer

Supplemental wages such as bonuses, commissions, and overtime pay are subject to federal withholding taxes, unemployment taxes, and FICA taxes (Social Security and Medicare taxes). Therefore, all the choices are correct.

Question 16

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?

Accepted Answer

The IRS allows employers to withhold a flat rate of 25% on supplemental wages like commissions if taxes have already been withheld from regular wages.

Question 17

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

Accepted Answer

A W-2C form (Corrected Wage and Tax Statement) is given to employees to correct payroll information that was previously reported on a W-2 form. This form is used to correct errors in items such as Social Security and Medicare taxes, wages, and tax withholdings. The correct information is reported on the W-2C form and submitted to the Social Security Administration and the employee.

Question 18

A taxpayer with an AGI of $157,350 for 2016 pays estimated taxes.The taxpayer can avoid an underpayment penalty by paying:

Accepted Answer

The answer of A taxpayer with an AGI of $157,350...

Question 19

On January 3,2016,Terrence employed a part-time household worker in his home.He paid the household worker $720 per month for 2016.What amount of FICA taxes is Terrence required to record on Schedule H?

Accepted Answer

The FICA taxes for a household worker in 2016 were 15.3% of their wages, with 7.65% paid by the employer and the other 7.65% withheld from the worker's pay. Therefore, for Terrence:

- The employer's portion of FICA taxes would be 7.65% of $720/month x 12 months = $659.52 
- He would also owe an additional 7.65% of $720/month x 12 months = $659.52 as the employee's portion of FICA taxes 
- So the total FICA taxes owed by Terrence would be $659.52 + $659.52 = $1,319.04

Rounding up to the nearest cent, the closest answer is C) $1,321.92.

Question 20

Irene earned wages of $119,200 during 2016.What share of FICA tax is Irene's employer responsible for in 2016?

Accepted Answer

The FICA tax rate for employers is 7.65%. Irene's employer is responsible for 7.65% of $119,200, which is $9,075.40.

Quiz 10: Payroll Taxes