Question 1

A company must withhold federal income taxes from payments made to independent contractors in which of the following cases?

Accepted Answer

A company must withhold federal income taxes from payments made to independent contractors only if the contractor has not provided a taxpayer identification number and the contract is $600 or more. The other options listed (A, B, and C) are not relevant factors in determining whether or not federal income taxes must be withheld.

Question 2

A personal allowance:

Accepted Answer

A personal allowance is a set amount of income that an individual is allowed to earn each year without having to pay income tax on it. It can be claimed by an employee to exempt a portion of their earnings from withholding. This allows them to take home a higher portion of their income before taxes are taken out. The amount of the personal allowance may change from year to year, but it is not indexed for inflation every calendar quarter. An employee can claim this allowance with each employer they work for during the year, but the amount allowed for a single versus a married taxpayer may differ. However, the amount for 2017 was not specifically mentioned (choice A).

Question 3

Which of the following cannot be included in a cafeteria plan?

Accepted Answer

Educational assistance cannot be included in a cafeteria plan. Cafeteria plans, also known as Section 125 plans, allow employees to choose from a variety of pre-tax benefit options, but educational assistance benefits are not eligible for inclusion under the IRS rules governing these plans.

Question 4

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Edward Dorsey is a part-time employee,and during the biweekly pay period he earned $395.In addition,he is being paid a bonus of $300 along with his regular pay.If Dorsey is single and claims two withholding allowances,how much would be deducted from his pay for FIT? (There are two ways to determine his deduction-do not use table for percentage method. )​
​

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 5

Which of the following forms is used to report rents paid over $600 to landlords?

Accepted Answer

Form 1099-MISC is used to report rents paid to landlords over $600. The other forms listed are not used for this purpose.

Question 6

Which of the following forms is used to report the amount of distributions from pension and retirement plans?

Accepted Answer

Form 1099-R is used to report the amount of distributions from pension and retirement plans.

Question 7

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Ted Duerson,previously unemployed for the calendar year,earned $13,200 during the biweekly period from September 29 to October 13 (20th payroll period).He has made a written request for the part-year employment method of withholding.If Duerson is married and claims zero withholding allowances,how much FIT tax would be withheld from his gross pay using the part-year employment method (using the wage-bracket table)?

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 8

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Use the appropriate table to determine the amount to withhold for federal income tax from each of the following biweekly wages (biweekly withholding allowance = $155.80):
Patrick Patrone (single,2 allowances),$925 wages
__________
Carson Leno (married,4 allowances),$1,195 wages
__________
Carli Lintz (single,0 allowances),$700 wages
__________
Gene Hartz (single,1 allowance),$2,500 wages
__________
Mollie Parmer (married,2 allowances),$3,600 wages
__________

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 9

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Determine the income tax to withhold from the biweekly wages of the following employees (wage-bracket):
Karen Overton (single,0 allowances),$900 wages
__________________
Nancy Haller (married,4 allowances),$1,000 wages
__________________
Alan Glasgow (married,1 allowance),$980 wages
__________________
Joseph Kerr (single,4 allowances),$720 wages
__________________
Ginni Lorenz (single,1 allowance),$580 wages
__________________

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 10

To curb the practice of employees filing false Forms W-4,the IRS requires that an employer submit to the agency a copy of each Form W-4:

Accepted Answer

The IRS requires employers to submit a copy of each Form W-4 that the IRS has specifically requested in writing. This is a measure to ensure compliance and accuracy in withholding tax calculations.

Question 11

An employer must file an information return under all of the following conditions except:

Accepted Answer

The answer of An employer must file an information return...

Question 12

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Carson Smart is paid $1,200 every two weeks plus a taxable lodging allowance of $100.He is a participant in the company 401(k)plan and has $150 deducted from his pay for his contribution to the plan.He is married with two allowances.How much would be deducted from his pay for federal income tax (using the wage-bracket table)?

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 13

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Calculate the amount to withhold from the following employees using the biweekly table of the percentage method.
Kenneth Karcher (single,1 allowance = $155.80),$895 wages
__________
Mary Kenny (married,2 allowances = $311.60),$1,900 wages
__________
Thomas Carney (single,0 allowances),$1,460 wages
__________

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 14

All of the following are properly defined as wages subject to the withholding of federal income taxes except:

Accepted Answer

Payments made under worker's compensation law are not subject to federal income tax withholding as they are considered compensation for work-related injuries or illnesses.

Question 15

Beech refuses to state her marital status on Form W-4 which she gave to you,the payroll manager,when she was hired.You should:

Accepted Answer

When an employee refuses to state their marital status on Form W-4, the employer is required to withhold income taxes as if the employee is single with no allowances, according to IRS guidelines.

Question 16

Arch gives you an amended Form W-4 dated March 10,2017 on which he claims two additional withholding allowances.He asks you to refund the excess taxes that were deducted from January 1 to March 10 when Arch claimed only one withholding allowance.You should:

Accepted Answer

The employer cannot refund the excess taxes that were already withheld before the employee submitted the amended Form W-4. The adjustment will have to be made when the employee files their annual income tax return. The employer can only adjust future withholding based on the new Form W-4 going forward.

Quiz 4: Income Tax Withholding

A company must withhold federal income taxes from payments made to independent contractors in which of the following cases?

A personal allowance:

Which of the following cannot be included in a cafeteria plan?

Which of the following forms is used to report rents paid over $600 to landlords?

Which of the following forms is used to report the amount of distributions from pension and retirement plans?

To curb the practice of employees filing false Forms W-4,the IRS requires that an employer submit to the agency a copy of each Form W-4:

An employer must file an information return under all of the following conditions except:

All of the following are properly defined as wages subject to the withholding of federal income taxes except:

Beech refuses to state her marital status on Form W-4 which she gave to you,the payroll manager,when she was hired.You should:

Arch gives you an amended Form W-4 dated March 10,2017 on which he claims two additional withholding allowances.He asks you to refund the excess taxes that were deducted from January 1 to March 10 when Arch claimed only one withholding allowance.You should: