chapter 5

Jenna is a full-time nonexempt salaried employee who earns $1,360.00 per biweekly pay period. She is single with no dependents and has not indicated checkbox withholding on her 2021 Form W-4. She both lives and works in Bowling Green, Kentucky. Assuming she had no overtime, what is the total of her federal and state taxes for a pay period?

$167.00

Sam is a security guard for a local facility. He earned $1,415.50 during the most recent biweekly pay period and has earned $22,648.00 year-to-date. He is married filing jointly and claims two dependents under the age of 17 on his 2021 Form W-4. He has no pre-tax deductions. What is Sam's Medicare tax liability for the pay period?

$20.52 1415.50*.0145=20.52

Amie is a full-time exempt employee in Sitka, Alaska, who earns $80,100.00 annually. She is married filing jointly with two dependents under 17 years of age. Her spouse is unemployed, so her federal income tax is $0. She contributes 4% of her gross pay to her 401(k) and has her health insurance premium of $150 deducted on a pre-tax basis. She has $100 deducted per pay period for a Salvation Army contribution and has union dues of $95 per pay period. She is paid biweekly. What is her net pay?

$2388.33

Catherine is a salaried nonexempt employee in Evanston, Wyoming, who earns $29,650 per year for a standard 40-hour workweek and is paid biweekly. She is single with no dependents and takes the standard withholding During the last pay period, she worked 5 hours of overtime. She contributes 3% of her gross pay to her 401(k) on a pre-tax basis and has no other pre-tax deductions. Catherine has a garnishment of 10% of her disposable income for a consumer credit lien. What is her net pay

$927.27

Catherine is a salaried nonexempt employee in Evanston, Wyoming, who earns $29,900 per year for a standard 40-hour workweek and is paid biweekly. She is single with no dependents and takes the standard withholding During the last pay period, she worked 5 hours of overtime. She contributes 3% of her gross pay to her 401(k) on a pre-tax basis and has no other pre-tax deductions. Catherine has a garnishment of 10% of her disposable income for a consumer credit lien. What is her net pay

$933.90

Audrey earned $1,960.00 during the most recent semimonthly pay period. She is married filing jointly, has not indicated Step 2 checkbox withholding, has no pre-tax deductions, and has filed a 2021 Form W-4. Based on the following table, how much should be withheld from her gross pay for Federal income tax?

$94.00

which of the following states does not have state income tax deducted from employee pay?

Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming

The percentage method of determining an employee's federal income tax deductions __________.

Considers deduction for dependents and additions for other income.

Post-Tax Deductions are amounts ______________.

That include both mandated and voluntary deductions

Which of the following statements is true about Medicare tax?

The Medicare tax rate for most employees is 1.45%

Why might an employee elect to have additional federal income tax withheld?

The employee wishes to reduce income tax liability.

Madison is a full-time exempt employee in Tullahoma, Tennessee, who earns $49,550 annually. She is married filing jointly with one dependent under 17 and one other dependent per her 2021 Form W-4, and is paid semimonthly. Madison checked the Step 2 checkbox and has $65.00 additional withholding as a result of her spouse's employment. She contributes $150.00 per pay period to her 401(k) and has pre-tax health insurance and AFLAC deductions of $50.00 and $75.00, respectively. Amanda contributes $25.00 per pay period to the United Way. What is her net pay?

$1,511.68

Mackenzie is a full-time employee in Austin, Texas, who earns $4,300 per month and is paid semimonthly. She is married filing jointly with one dependent under 17 and has indicated Step 2 checkbox withholding. She has a qualified health insurance deduction of $50 per pay period and contributes 3% to her 401(k), both of which are pre-tax deductions. Her additional withholding amount for step 2 is $150.75. What is her net pay?

$1634.43

Heather is an employee with a period gross pay of $3,135.00. She elects to have 5.00% of her gross pay withheld for her 401(k) contribution and has no other pre-tax deductions. What will be her taxable income be for Federal income taxes?

$2978.25

which of the following affects an employee's federal tax withholding for Form W-4 dated 2020 or later?

Additional Income

Garnishments may include deductions from employee wages on a post-tax basis for items such as:

Charitable contributions

__________ is an emerging pay disbursement method that allows nearly instantaneous access to compensation.

Cryptocurrency

The use of ___________ is the easiest pay disbursement method for employers.

Direct Deposit

What is an advantage of paycards from the employee's perspective?

Direct access to compensation on the pay date

Which of the following items forms the connection between payroll and human resources?

Employee Information Form

The social tax wage base indicates the maximum calendar-year employee earning

F

Retirement plan contributions are an example of post-tax voluntary deductions

False

Computation of net pay involves deducting only mandatory deductions from gross pay.

False Computation of net pay involves deduction of mandatory and voluntary deductions from gross pay.

If a firm has employees in multiple states, it may choose one of those state's income tax laws for all employees.

False The employer must pay employee taxes based on each employee's permanent residence.

Federal income tax, Medicare tax, and Social Security tax amounts withheld from employee pay are computed based on gross pay less all pre-tax deductions.

False Some pre-tax deductions are not subject to FICA

The percentage of the Medicare tax withholding __________.

Is the same for every employee earning less than $142,800

The tax cuts and jobs act of 2017 changed the process of determining federal tax withholding amounts as of-

January 1 2020

Best practices for paying employees by cash includes which of the following?

Logging the number, amount, and purpose of each payroll disbursement

which is not a step in computing net pay for each period?

Report fringe benefit balances

Garnishments are court-ordered amounts that an employer must withhold from an employee's post-tax pay and remit the amount to the appropriate authority.

True

The percentage method of computing federal tax withholding yields more accurate amounts than the wage-bracket method.

True

The percentage method of determining an employee's federal income tax deductions __________.

considers deductions for dependents and additions for other income

State and Local Income Tax rates __________.

vary among states and localities

Katie earns $2,000 per period. She contributes 6% per pay period to a 401(k) plan, $30 per pay period to a charitable contribution, $90 per pay period to union dues, and $150 per pay period to a Section 125 qualified insurance plan offered by her employer. What is the amount of her post-tax deductions?

$120

Gabrien is a full-time exempt employee at a local electricity co-operative. He earns an annual salary of $55,170 and is paid biweekly. He contributes 3% of his earnings to his 401(k) account and has no other pre-tax deductions. What is his Social Security tax deduction for each pay period?

$131.56

Jenna is a full-time nonexempt salaried employee who earns $1,260.00 per biweekly pay period. She is single with no dependents and has not indicated checkbox withholding on her 2021 Form W-4. She both lives and works in Bowling Green, Kentucky. Assuming she had no overtime, what is the total of her federal and state taxes for a pay period?

$150.00

Ian earned $1,340.00 during the most recent semimonthly pay period. He is single and has indicated checkbox withholding, has no pre-tax deductions, and has filed a 2021 Form W-4. Using the following table, how much should be withheld for federal income tax?

$151.00

Quin is a part-time nonexempt employee in Sioux Falls, south Dakota, who earns $11.35 per hour. During the last biweekly pay period he worked 35 hours. He is married filing jointly with three dependents under 17 and takes the standard withholding, which means his federal income tax deduction is $0. What is his net pay?

$366.86

Billie is a full-time exempt employee in Providence, Rhode Island, and is paid biweekly. She earns $54,550 annually and indicated married filing jointly with checkbox withholding on her 2021 Form W-4. She has no additional federal tax withholding. Her state income tax rate is 3.75%. What is the total amount of her FICA, federal, state, and FICA taxes per pay period, assuming pre-tax deductions of 4% for her 401(k) and $150.00 for health insurance?

$377.93

Whitney is an adjunct faculty at a local college, where she earned $900.00 during the most recent semimonthly pay period. Her prior year-to-date pay is $13,500. She is single and has indicated a dependent under 17 on her 2020 Form W-2. She has no pre-tax deductions. What is Whitney's Social Security tax for the pay period?

$55.80

Michael is a part-time nonexempt employee in Tallahassee, Florida, who earns $17.50 per hour. During the last biweekly pay period he worked 43 hours, 3 of which were considered overtime. He is single with no dependents and has not indicated checkbox withholding in step 2. What is his net pay?

$690.18

Jess earned $1,818.50 during the most recent biweekly pay period. He contributes $50 per pay period to his 401(k) plan. He is married filing jointly, has standard withholding and has filed a 2021 Form W-4. Based on the following table, how much Federal income tax should be withheld from his pay?

$81.00

What role does the employer play regarding an employee's FICA tax?

Collector and depositor

What is a disadvantage to using checks as a method of transmitting employee compensation?

Loss or destruction of the check

Which of the following steps is not used to compute an employee's grossed-up pay?

Multiply the gross pay by the sum of the income tax and FICA tax rates.

The annual payroll tax guide with tax withholding amounts distributed by the IRS is called __________.

Publication 15-T