Question 1

Angie earned $124,200 during 2016.She is single,claims two withholding allowances,and is paid monthly.How much will Angie's employer withhold in social security taxes for 2016?

Accepted Answer

Social security tax is calculated at 6.2% of wages up to the wage base limit. In 2016, the wage base limit was $118,500. Therefore, $118,500 x 6.2% = $7,347.00.

Question 2

Harry has two jobs.He earns $118,700 from his first job and $10,000 from his second job.How much total FICA withholding will Harry have withheld from his wages from working two jobs?

Accepted Answer

The FICA tax consists of Social Security and Medicare taxes. For 2023, the Social Security tax rate is 6.2% on the first $160,200 of earnings, and the Medicare tax rate is 1.45% on all earnings. Harry's total earnings are $128,700. Social Security tax is $128,700 * 6.2% = $7,979.40. Medicare tax is $128,700 * 1.45% = $1,854.15. Total FICA withholding is $7,979.40 + $1,854.15 = $9,833.55.

Question 3

Brenda is a self-employed accountant.She has net earnings profit)from her practice of $74,000.Her self-employment taxes for the year are: Round your answer to 2 decimal places.)

Accepted Answer

The answer of Brenda is a self-employed accountant.She has net...

Question 4

Angie earned $124,200 during 2016.She is single,claims two withholding allowances,and is paid monthly.How much FICA tax must Angie's employer remit to the federal government in 2016?

Accepted Answer

FICA tax consists of two parts: Social Security and Medicare. The Social Security tax rate is 6.2%, and the wage base limit for 2016 is $118,500. Therefore, the maximum amount of Social Security tax that Angie will owe is $7,347. The Medicare tax rate is 1.45%, and it applies to all of Angie's earnings. Therefore, Angie's employer will remit $1,802.80 ($124,200 x 1.45%) in Medicare taxes. The total FICA tax that Angie's employer must remit to the federal government is the sum of the Social Security and Medicare taxes, which is $9,149.80. Subtracting the total FICA tax from Angie's total earnings gives her taxable income, which is $124,200 - $9,149.80 = $115,050. To calculate Angie's federal income tax liability, we need more information about her deductions and other relevant factors.

Question 5

Jack is married,is paid $5,153 biweekly,and claims three allowances.What amount of federal income tax is withheld from his gross wages each pay period?

Accepted Answer

To calculate the amount of federal income tax withheld per pay period, we need to use the IRS withholding tables. Using the 2021 tables for a biweekly pay period and claiming three allowances, we find that the amount of federal income tax withheld from $5,153 is $763.90. Therefore, the correct answer is B.

Question 6

Angie earned $124,200 during 2016.She is single,claims two withholding allowances,and is paid monthly.How much federal withholding tax will Angie's employer withhold for 2016?

Accepted Answer

The answer of Angie earned $124,200 during 2016.She is single,claims...

Question 7

Esmeralda is single and is paid $759 per week claiming two allowances.What is the amount of federal income tax withheld on Esmeralda's gross wages for the week? Use the wage bracket table in Appendix A at the end of the chapter.

Accepted Answer

According to the wage bracket table in Appendix A, for a single person claiming two allowances and earning between $742 and $769 per week, the federal income tax withholding is $74. Therefore, the amount of federal income tax withheld on Esmeralda's gross wages for the week is $74. Answer choice C is correct.

Question 8

Daniel is a computer technical support representative earning $95,000 per year and also has a sole proprietor consulting business where he earned $28,000 for 2016.How much of his total earnings are subject to self-employment tax for 2016?

Accepted Answer

The answer of Daniel is a computer technical support representative...

Question 9

Which of the following statements regarding the lookback period for 2016 is correct?

Accepted Answer

The answer of Which of the following statements regarding the...

Question 10

The payroll period for a semiweekly schedule depositor ends and is paid on a Friday.The employer must deposit the federal taxes withheld for this pay period on or before:

Accepted Answer

For semiweekly schedule depositors, if the payday is on a Friday, the deposit is due by the following Wednesday.

Question 11

If on any day during the month,an employer accumulates $100,000 or more in tax liability,the taxes must be deposited:

Accepted Answer

If an employer accumulates $100,000 or more in tax liability on any day, they must deposit the taxes by the next banking day, regardless of their regular deposit schedule.

Question 12

What is the maximum state unemployment credit allowed for FUTA purposes?

Accepted Answer

The maximum state unemployment credit allowed for FUTA purposes is 54% if all state unemployment taxes have been paid. This means that employers who have paid all state unemployment taxes and are eligible for the maximum credit would only owe FUTA tax at a rate of 0.6% (6% minus the maximum credit of 5.4%). Option A is incorrect because 90% is not the maximum credit allowed. Option B is incorrect because the maximum credit is 54%, not 60%. Option D is incorrect because there is a maximum credit allowed, although some employers may not be eligible for the maximum credit depending on their state's unemployment tax rates and payments.

Question 13

Ben has 2 jobs and both employers withhold FICA taxes.From his first job,Ben earned $85,034 and from his second job,he earned $34,496.How much can Ben claim as additional payment on his Form 1040 as excess social security tax paid in 2016?

Accepted Answer

For 2016, the social security tax rate is 6.2% and the maximum taxable earnings is $118,500. Since Ben earned $85,034 from his first job, he would have paid the maximum social security tax on this income ($5,011.48). From his second job, he earned $34,496, which means he paid $2,136.03 in social security tax (6.2% x $34,496). However, since Ben's total income ($85,034 + $34,496 = $119,530) is over the maximum taxable earnings limit, he paid $7,147.51 in social security tax. The maximum social security tax he should have paid is $7,347.90 ($118,500 x 6.2%). Therefore, Ben can claim $200.39 ($7,347.90 - $7,147.51) as additional payment on his Form 1040. Since only the excess social security tax paid is claimed on Form 1040, the correct answer is $63.86 (A).

Question 14

Lynita has two jobs and earned $92,316 from her first job and $26,345 from her second job.How much total FICA taxes will Lynita have withheld from her wages from working two jobs? Round your answer to 2 decimal places.)

Accepted Answer

The answer of Lynita has two jobs and earned $92,316...

Question 15

Angie earned $124,200 during 2016.She is single,claims two withholding allowances,and is paid monthly.How much will Angie's employer withhold in Medicare taxes for 2016?

Accepted Answer

Medicare tax rate is 1.45% of earnings, and there is no maximum limit. Angie's annual Medicare tax contribution will be:

$124,200 x 1.45% = $1,800.90

Since she is paid monthly, her employer will withhold 1/12th of this amount each month:

$1,800.90 / 12 = $150.08

However, since Angie claims two withholding allowances, she may be able to reduce the amount of Medicare tax withheld. This would depend on her total income, deductions, and credits for the year.

Question 16

Ebony earned $86,760 during 2016.She is single,paid semimonthly,and claims one withholding allowance.How much will Ebony's employer withhold from her,in total for each pay period for FICA and federal withholding taxes? Round your answer to 2 decimal places.)

Accepted Answer

To calculate the total withholding for each pay period for FICA and federal withholding taxes, we need to first calculate Ebony's gross pay and then calculate the withholding amounts based on that.

Ebony's gross pay for the year is $86,760, which means her semimonthly pay is $3,614 ($86,760/24).

For FICA taxes, the Social Security tax rate is 6.2% and the Medicare tax rate is 1.45%. Therefore, the total FICA tax rate is 7.65%.

Ebony's semimonthly gross pay of $3,614 means her FICA tax withholding will be:

$3,614 x 7.65% = $276.37

For federal withholding taxes, we need to use the IRS tax tables to calculate the amount. Based on the information provided (single, one withholding allowance), we can assume that Ebony will use the "Single" section of the tax tables.

Using the IRS tax tables for biweekly pay periods (which are close to semimonthly pay periods) and assuming Ebony receives two pay periods each month, we can estimate her federal withholding to be:

$445 for the first $3,557 of taxable income
plus 25% of the amount over $3,557

Using this formula, we can estimate Ebony's federal withholding each pay period as follows:

$445 + (25% x ($3,614 - $3,557)) = $938.40

Therefore, Ebony's employer will withhold a total of $1,214.77 ($276.37 + $938.40) from her each semimonthly pay period for FICA and federal withholding taxes. Rounded to two decimal places, this is choice B, $938.40.

Question 17

Alexandra earned $200 in tips in June.When must she inform her employer of her tips on Form 4070 for federal income tax and FICA withholding purposes?

Accepted Answer

Alexandra must report her tips to her employer by the 10th of the following month, so for tips earned in June, she must report them by July 10.

Question 18

If,on any day during the month,an employer who is a monthly schedule depositor accumulates a $100,000 tax liability,which of the following statements is true?

Accepted Answer

If an employer accumulates a tax liability of $100,000 or more on any day during the month, they must deposit the tax by the next banking day and they will be considered a semiweekly depositor for the remainder of the current year and the following year. Therefore, option B is the correct answer. Option A is incorrect because the deposit must be made by the next banking day, not by the last day of the month. Option C is incorrect because the employer will remain a semiweekly depositor for the entire following year as well, not just for the remainder of the current year. Option D is incorrect because the deposit must be made by the next banking day, not on Wednesdays or Fridays.

Question 19

If a taxpayer works for more than one employer during the year,how much in FUTA taxes is remitted in the name of the taxpayer?

Accepted Answer

Both employers must remit FUTA taxes they pay to the employee on the first $7,000 of wages earned by the employee at each job. This means that if a taxpayer works for more than one employer during the year, both employers must remit FUTA taxes on wages earned by the taxpayer up to $7,000 at each job.

Question 20

Carolyne is married,is paid $1,390 per week,and claims two withholding allowances.What amount of federal income tax is withheld from her gross wages each week using the wage bracket table in Appendix A at the end of the chapter.

Accepted Answer

The answer of Carolyne is married,is paid $1,390 per week,and...

Quiz 10: Payroll Taxes