Question 1

The original copy of all Forms W-2 and Form W-3 must be filed with the Social Security Administration by January 31 of the year following the calendar year in which the wages were paid, regardless of the tax year of the employer.

Accepted Answer

This statement is true as per the IRS regulations.

Question 2

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

Accepted Answer

Employers can receive a credit of up to 5.4% of taxable wages paid to each employee for state unemployment tax paid, which can offset their FUTA tax liability.

Question 3

In 2019, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The third employee worked 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 2019?

Accepted Answer

The total wages earned by the two full-time employees are $50,000 ($25,000 x 2). The total wages subject to state unemployment tax is $14,000 ($7,000 x 2). The tax paid for each of the full-time employees is $756 ($14,000 x 5.4%). The tax paid for the part-time employee is $216 ($4,000 x 5.4%). The total amount of state unemployment tax paid by Willow Corporation is $1,728 ($756 x 2 + $216). Therefore, the answer is D) $972.

Question 4

The Pear Corporation pays its employees every 2 weeks. During the look-back period, in each pay period the total withholding and FICA tax (employees' and employer's share) amounted to $750. How often must the Pear Corporation deposit payroll taxes?

Accepted Answer

The IRS requires that if the total payroll tax liability is less than $2,500 in a quarter, the employer can deposit monthly. Since $750 every 2 weeks amounts to $1,500 per month, Pear Corporation must deposit monthly.

Question 5

Provide answers to the following questions:
a. What form does an employer use to report wages to an employee?
b. When must the employer give this form to the employee?
c. What form does an employer use to report wages to the Social Security Administration?
d. When must the employer file the form with the Social Security Administration?

Accepted Answer

The answer of Provide answers to the following questions:
a. What...

Question 6

For each of the following payments, indicate the form (Form W-2, W-4, W-2G, 1099-B, 1099-DIV, 1099-INT, 1099-MISC, or 1099-R) that should be used to report the payment.
​
a.Dividends from a mutual fund
b.Las Vegas gambling winnings
c.Interest paid by a bank
d.Payment of salary and commissions to an employee
e.Distribution from an IRA account

Accepted Answer

The answer of For each of the following payments, indicate...

Question 7

The FUTA tax is paid by:

Accepted Answer

FUTA (Federal Unemployment Tax Act) tax is paid solely by employers. It is used to fund unemployment benefits for workers who have lost their jobs.

Question 8

Which one of the following payroll tax deposit schedules is not a rule that applies for a class of employers?

Accepted Answer

The eight-day deposit rule does not exist as a rule for payroll tax deposit schedules. Employers are generally required to follow either the monthly, semi-weekly, next-day, or yearly deposit schedules, depending on the amount of their tax liability and other specific criteria.

Question 9

When required, gambling winnings are reported by the gambling establishment on Form 1099-MISC.

Accepted Answer

Gambling winnings are reported by the gambling establishment on Form W-2G, not Form 1099-MISC. Form W-2G is specifically used for reporting gambling winnings and any federal income tax withheld from those winnings.

Question 10

Form 1099-DIV is an information return used to show the payment of:

Accepted Answer

Form 1099-DIV is used to report dividends paid by corporations to their shareholders.

Question 11

Which of the following statements is true with regard to the reimbursement of employee business expenses?

Accepted Answer

Reimbursements received by an employee under a plan which contains a requirement to return excess amounts, and the employee does so on a timely basis, are excluded from the definition of wages subject to withholding. The other options are either incorrect or partially incorrect.

Question 12

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

Accepted Answer

The FUTA tax is not voluntary, but mandatory for most employers. It is a federal tax that funds unemployment benefits for workers who have lost their jobs.

Question 13

Which of the following forms is used by an employer to report quarterly wages and federal payroll tax withholdings and deposits?

Accepted Answer

Form 941 is used by an employer to report quarterly wages and federal payroll tax withholdings and deposits, while Form 940 is used to report unemployment tax. Form 1099 is used by a business to report payments made to independent contractors, and Form W-2 is used by an employer to report employee earnings and tax withholdings annually. None of these forms fulfill the requirement mentioned in the question.

Question 14

Which one of the following forms must an employer provide to his employee by January 31 of the following year?

Accepted Answer

An employer must provide a W-2 form to each of their employees by January 31 of the following year. The W-2 form reports an employee’s annual wages and the amount of taxes withheld from their paycheck during the year.

Question 15

Employer deposits of withheld taxes may be made to any bank.

Accepted Answer

Employer deposits of withheld taxes must be made to an authorized financial institution (such as a bank or other federally insured depository institution) as designated by the U.S. Treasury Department.

Question 16

The FUTA tax for 2019 is based on 6.2 percent of each employee's wages up to $10,000.

Accepted Answer

The FUTA tax rate for 2019 is 6.0 percent on the first $7,000 of each employee's wages.

Question 17

Which of the following forms should be used by a company to report a 2019 payment of $1,500 to a computer consultant who is not an employee of the company?

Accepted Answer

Form 1099-MISC is used to report payments of $600 or more made to non-employees, including independent contractors and freelancers. As the payment to the computer consultant is for services performed as an independent contractor, Form 1099-MISC should be used to report this payment. The other forms listed are not applicable as they are used for different types of payments or for reporting employee compensation.

Question 18

Gambling winnings must be reported to the IRS, but withholding of taxes on winnings is never required.

Accepted Answer

Withholding of taxes on gambling winnings may be required in certain situations, such as if they exceed a certain threshold amount or if the winner does not provide their taxpayer identification number. It is important to consult a tax professional for guidance on reporting and withholding requirements for gambling winnings.

Question 19

Dividends paid to a shareholder by a corporation should be reported on which of the following forms?

Accepted Answer

Dividends paid to a shareholder by a corporation should be reported on Form 1099-DIV.

Question 20

Employers must provide employees with their Form W-2 by February 15 of the year following the calendar year of payment of the wages.

Accepted Answer

Employers must provide employees with their Form W-2 by January 31 of the year following the calendar year of payment of the wages.

Quiz 9: Payroll, Estimated Payments and Retirement Plans