Question 1

Employers who fail to file employment tax returns are subject to both civil and criminal penalties.

Accepted Answer

Employers who fail to file employment tax returns can face civil penalties such as fines and interest charges, as well as criminal penalties including imprisonment and hefty fines.

Question 2

Which of the following deposit requirements pertains to a nonagricultural employer who has employer FICA taxes and withheld employee FICA taxes and income taxes of $125,000 at the end of payday on Friday, August 14, 20--?

Accepted Answer

According to the IRS deposit rules, the taxes must be deposited by the close of the next banking day, which would be Monday, August 17 in this case. Therefore, option B is the correct choice. Option A is incorrect because the deposit is due on the next banking day and not on August 18. Option C is incorrect because it is not a specific date as required by the deposit rules. Option D is incorrect because undeposited taxes cannot be carried over to the end of the following month. Option E is incorrect because there is a specific deposit requirement in this situation.

Question 3

To be designated a semiweekly depositor, how much in employment taxes would an employer have reported for the four quarters in the lookback period?

Accepted Answer

The answer of To be designated a semiweekly depositor, how...

Question 4

Which of the following deposit requirements pertains to a monthly depositor who has accumulated employment taxes of $2,900 at the end of October?

Accepted Answer

According to the IRS deposit schedule for monthly depositors, if the accumulated employment taxes at the end of a month (e.g. October) are greater than $2,500, the taxes must be deposited by the 15th of the following month (e.g. November 15). Therefore, in this scenario, the taxes must be deposited on or before November 15.

Question 5

If an employer fails to file an employment tax return on the due date, a penalty based on a certain percentage of the amount of tax required to be reported may be added to the tax.

Accepted Answer

If an employer fails to file an employment tax return by the due date, a penalty may be added based on a percentage of the amount of tax required to be reported. This penalty is known as the failure-to-file penalty.

Question 6

The taxes imposed under the Social Security Act consist of:

Accepted Answer

The taxes imposed under the Social Security Act consist of two taxes on employers, two taxes on employees (OASDI and HI taxes), and taxes on the net earnings of the self-employed. Therefore, all of the above options are correct.

Question 7

The FICA tax rates for the self-employed are:

Accepted Answer

The answer of The FICA tax rates for the self-employed...

Question 8

FICA excludes from coverage all of the following kinds of employment except:

Accepted Answer

FICA covers all employment except for a few specific exemptions. This includes domestic service performed in a private home, agricultural labor, and certain types of government employment. However, federal government secretaries hired in 1990 are not one of the exemptions and are subject to FICA taxes.

Question 9

Form 944 (annual form) can be used by all new employers instead of Form 941.

Accepted Answer

Form 944 is specifically designed for small employers whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less, allowing them to file annually instead of quarterly. Not all new employers qualify to use Form 944; it depends on their tax liability.

Question 10

The OASDI taxable wage base is correctly defined as:

Accepted Answer

The OASDI taxable wage base is the maximum amount of wages that is subject to the OASDI tax. It is not all amounts earned or paid by an employee during a year.

Question 11

Each of the following items is accurately defined under FICA as taxable wages except:

Accepted Answer

The answer of Each of the following items is accurately...

Question 12

Which of the following deposit requirements pertains to a semiweekly depositor who has accumulated employment taxes of $17,500 on payday, Saturday, May 16, 20--?

Accepted Answer

The answer of Which of the following deposit requirements pertains...

Question 13

Which of the following statements does not describe an employee's FICA taxes and withholdings?

Accepted Answer

C) The employee's liability for the FICA taxes ends once the employer has withheld them from the employee's wages, making this statement incorrect.

Question 14

Barr fails to make a timely deposit of FICA taxes and withheld income taxes until five days after the due date.The penalty facing Barr is:

Accepted Answer

The answer of Barr fails to make a timely deposit...

Question 15

Employers file Form 941 with the IRS center of the region in which the employer's principal place of business is located.

Accepted Answer

Employers file Form 941 with the IRS center based on the location of their principal place of business.

Question 16

Which of the following payments are not taxable for FICA?

Accepted Answer

Wage supplements to cover the difference between employees' salaries and their military pay are not subject to FICA taxes, as they are considered a reimbursement rather than regular wages.

Question 17

FICA defines all of the following as wages except:

Accepted Answer

Total cash tips of $15 received by a tipped employee in May do not meet the FICA requirement for reporting tips as wages, as the minimum amount that must be reported is $20 in a month.

Question 18

FICA defines all of the following as employees except:

Accepted Answer

Partners are not classified as employees under FICA because they are considered self-employed. The other choices, including vice presidents, superintendents, full-time life insurance salespersons, and payroll managers, are all typically considered employees under FICA.

Question 19

Ashe, an employer, has made timely deposits of FICA taxes and withheld income taxes during the first quarter of 2016.The latest date on which she may file Form 941 is:

Accepted Answer

The answer of Ashe, an employer, has made timely deposits...

Question 20

Form 941 is due on or before the 15th day of the month following the close of the calendar quarter for which the return is made.

Accepted Answer

The answer of Form 941 is due on or before...

Quiz 3: Social Security Taxes