Chapter 3 - T and F

True

A child working for his fathers corporation is not exempt from coverage under FICA.

False

A monthlt depositor's employment taxes total $3,800 on Wednesday, March 31, 20--, the end of the calendar quarter. The taxes should be deposited on or before the following Tuesday.

True

Employees and independent contractors pay different FICA taxes.

False

Employer contributions for retirement plan payments for employees are defined as wages and are thus subject to FICA taxes.

False

Employers must withhold FICA taxes on payments that are made to independent contractors.

False

Employers who file form 941 electronically are given and extra 10 days from the normal due date to make their deposits.

False

Every employer has the right to choose the method (electronic or paper coupon) of depositing employment taxes.

True

If an employee defers compensation into a 401(k) plan, the deferral (payroll deduction) is still subject to social security taxes

False

If tax deposits are made on time, there is no penalty for late filing of Form 941.

True

If the last day for filing Form 941 falls on a Saturday, the return may be filed on the next business day.

False

Once a person reaches the age of 65, social security taxes are not taken out of his or her paycheck.

False

Once the initial for 941 is filed by a company, the company does not need to file Form 941 for a quarter in which there are no taxes to report.

False

Part time employees pay a FICA tax at half the tax rate of full time employees.

False

Self-employed persons who also work other jobs as employees do not have to pay any FICA taxes on their net self-employment earnings.

True

The requirements for depositing FICA taxes and income taxes withheld from employees' wages vary according to the amount of such taxes reported during a "lookback period."

False

Under FICA, each partner in a partnership is defined as an employee of that organization.

True

Under FICA, employers must collect the employees FICA taxes on tips reported by each employee.

False

Year end bonuses paid to employees are not subject to the hospital insurance (HI) part of the FICA tax.

True

if on any day during a deposit period an employer has accumulated $100,000 or more in undeposited employment taxes, the taxes must be deposited on the next banking day.