Payroll Chapter 5

In 2020, Social Security taxes are calculated with a wage base of: Multiple choice question. $117,250 $137,700 $118,750 6%

$137,700

Trish earned $1,995.90 during the most recent semimonthly pay period. She is married filing jointly, has indicated checkbox withholding, has no pre-tax deductions, and has filed a 2020 Form W-4. Based on the following table, how much should be withheld from her gross pay for Federal income tax? (Use the wage-bracket table.)

$170.00

An employee earns $4,000 per week and contributes $150 to their 401(k) plan and $75 to United Way. What amount of employee's wages are subject to federal income taxes? Multiple choice question. $3,775 $3,850 $4,000 $2,675

$4,000 - 150 = $3,850.

George had gross wages of $1,000, 401(k) deduction equal to 15% of gross wages and health insurance of $50. George's taxable income is $

$800.00

Ramani earned $1,860.50 during the most recent biweekly pay period. He contributes $100 to his 401(k) plan. He is married filing jointly, has standard withholding and has filed a 2020 Form W-4. Based on the following table, how much Federal income tax should be withheld from his pay? (Use the wage-bracket table.)

$82.00 Explanation Gross Pay $1,860.50 401(k) contribution$100 Taxable wage $1,760.50

Samantha had gross wages of $1,025, a 401(k) deduction equal to 10% of gross wages and health insurance of $100 per pay period. Samantha's taxable income is $

$822.50

Max earned $1,005.55 during the most recent semimonthly pay period. He is single and has indicated checkbox withholding has no pre-tax deductions, and has filed a 2020 Form W-4. Using the following table, how much should be withheld for federal income tax?

$86.00

The combined rate for Social Security taxes in 2020 is Multiple choice question. 12.4% 1.24%. 6.2%. .00128.

12.4%

Vivienne is a full-time exempt employee in Easthampton, Massachusetts, and is paid biweekly. She earns $50,840 annually and indicated married filing jointly with checkbox withholding on her 2020 Form W-4. Her state income tax rate is 5.05%. What is the total amount of her FICA, federal, state, and FICA taxes per pay period, assuming no Pre-Tax Deductions?

Annual Salary $50,840.00 Period wage/Salary $1,955.38 Federal income tax $172.00 State income tax $98.75 FICA tax $149.59 Total Federal, State and FICA tax $420.33

Manju is a full-time exempt employee living in Illinois who earns $51,480 annually and is paid biweekly. She is married filing jointly and has indicated checkbox withholding on her 2020 Form W-4. What is the total of her Federal and state income tax deductions for the most recent pay period? $(Use the wage bracket tables. Illinois state income tax rate is 4.95%.

Annual Salary $51,480.00 Period wage/Salary $1,980.00 Federal income tax $172.00 State income tax $98.01 Total Federal and State income tax $270.01

Timing of the employee repayment of an advance is determined by: Multiple choice question. Court ordered obligations State legislation Employee agreement

Employee agreement

Who would be subject to additional Medicare taxes? Multiple choice question. Employees earning more than $200,000 All employers All employees Employers with employees earning more than $200,000

Employees earning more than $200,000

Jesse is a part-time nonexempt employee in Austin, Texas, who earns $13.20 per hour. During the last biweekly pay period he worked 35 hours. He is married filing join and takes the standard withholding, which means his federal income tax deduction is $13.00, and has declared additional federal tax withholding of $31 per pay period. What is his net pay?

Explanation Name Jesse Marital status M Dependents 0 Hourly rate or Period wage $13.20 No. of Regular Hours 35 Gross Earning $462.00 Taxable wages for Fedral W/H $462.00 Taxable wages for FICA $462.00 Fedral W/H $44.00 Social Security Tax $28.64 Medicare W/H $6.70 Net Pay $382.66

Melody is a full-time employee in Sioux City, South Dakota, who earns $6,200 per month and is paid semimonthly. She is married filing jointly and has indicated checkbox withholding allowance (use the wage-bracket tables). 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. What is her net pay?

Explanation Name Melody Marital Status M Dependents Yes Hourly rate or Period wage $3,100.00 Gross Earning $3,100.00 Insurance $50.00 401(k) $93.00 Taxable wages for Federal W/H $2,957.00 Taxable wages for FICA $3,050.00 Federal W/H $363.00 Social Security Tax $189.10 Medicare W/H $44.23 Net Pay $2,360.68

True or false: A company must have a physical address in a state to owe taxes there?

False Employees earning the wages in a state determine tax liability, not the employer's location.

Which of the following are more often employer-only taxes? Multiple select question. Federal unemployment taxes State unemployment taxes County income taxes Federal withholding taxes

Federal unemployment taxes State unemployment taxes

Which of the following are NOT determinates of federal withholding taxes on Form W-4 from 2019 or prior years? Multiple select question. Job classification Net pay Number of dependents Marital status

Job classification Net pay

Mandatory tax deductions for all employees include the following: Multiple select question. state unemployment taxes Medicare taxes federal income taxes Social Security taxes

Medicare taxes federal income taxes Social Security taxes

Natalia is a full-time exempt employee who earns $211,000 annually, paid monthly. Her year-to-date pay as of November 30 is $193,416.67. How much will be withheld from Natalia for FICA taxes for the December 31 pay date? (Social Security maximum wage is $137,700.

Part of Natalia's pay is subject to the additional Medicare tax, none is subject to Social Security tax. Annual Salary $ 211,000.00 Period wage/Salary $ 17,583.33 Prior year-to-date earnings $ 193,416.67 Taxable amount (Medicare only) $ 17,583.33 $ 11,000.00 Medicare tax rate 1.45% 0.9% Medicare tax $ 254.96 + $ 99.00 Total Medicare tax $ 353.96

Adam is a part-time employee who earned $720.00 during the most recent pay period. He is married filing jointly with dependents per his 2020 Form W-4. Prior to this pay period, his year-to-date pay is $6,717.39. How much should be withheld from Adam's gross pay for Social Security tax?

Period wage/Salary $ 720.00 Prior year-to-date earning $ 6,717.39 Taxable amount $ 720.00 Social Security tax rate 6.2% Social Security tax $ 44.64

Tierney is a full-time nonexempt salaried employee who earns $1,110.00 per biweekly pay period. She is single and has indicated checkbox withholding on her 2020 Form W-4. She both lives and works in Bowling Green, Kentucky. Assuming that she had no overtime, what is the total of her Federal and state taxes for a pay period?

Period wage/Salary $1,110.00 Federal income tax $110.00 State income tax $55.50 Total Federal and State income tax $165.50

In 2020, Publication 15T was issued for the sole purpose of income tax calculations.

Publication 15T

Old Age Surviver Disability Insurance (OASDI) is another name for: Multiple choice question. Medicare tax Social Security tax Federal income tax

Social Security tax

Which of the following are types of taxes employers would match? Multiple select question. State income taxes Social Security taxes Federal Unemployment taxes Medicare taxes

Social Security taxes Medicare taxes

FICA taxes comprise which of the following: Multiple select question. Social Security taxes. Medicare taxes. federal unemployment insurance tax. federal income tax.

Social Security taxes. Medicare taxes.

The following is true about state taxes on employees earnings: Multiple select question. Work locations affect the amount of taxes withheld. State taxes follow similar guidelines as federal taxes. States may apply a variety of additional taxes. States tax rates may vary by wage levels.

State taxes follow similar guidelines as federal taxes. States may apply a variety of additional taxes. States tax rates may vary by wage levels.

The following is true about state taxes on employees earnings: Multiple select question. States may apply a variety of additional taxes. States tax rates may vary by wage levels. State taxes follow similar guidelines as federal taxes. Work locations affect the amount of taxes withheld.

States may apply a variety of additional taxes. States tax rates may vary by wage levels. State taxes follow similar guidelines as federal taxes.

An employer must withhold state income taxes when Multiple choice question. The state in which they operate has a state income tax. Any time an employee works.

The state in which they operate has a state income tax.

Social Security and Medicare can be higher than federal taxable income because of retirement contributions. True false question.

True

The employee earnings record is especially important in computing and tracking the Social Security taxes due for each employee. True false question. True False

True

True or False: Most states have a state income tax.

True

The employee completes which form to identify the withholding information for federal income taxes? Multiple choice question. Application W-2 W-4 Publication 15

W-4

When would an employee want to have additional taxes withheld by their employer? Multiple select question. When the employee has zero dependents. When the employee has additional income for which no income tax is withheld. When the employee would like a smaller return. When the employee has more than one job.

When the employee has additional income for which no income tax is withheld. When the employee has more than one job.

Information on local (city or county) taxes can be found through Multiple select question. state revenue department. city revenue department. Internal Revenue Service. county revenue department.

city revenue department. county revenue department.

The maximum garnishment for an employee is determined on Multiple choice question. gross income. post-tax income. type of income taxes. disposable income.

disposable income.

When using the wage-bracket method the payroll accountant needs to know Multiple select question. mandatory withholdings. post-tax deductions. exemptions. marital status.

exemptions. marital status.

True or false: Disposable income limits apply to union dues.

false Union dues are not court mandated and are therefore not subject to disposable income limits.

Mandatory tax deductions for all employees include the following: Multiple select question. state unemployment taxes federal income taxes Social Security taxes Medicare taxes

federal income taxes Social Security taxes Medicare taxes

Medicare taxes provide for Multiple choice question. health insurance coverage for individuals eligible to enroll in Medicare benefits. supplemental income for retirees. health insurance coverage for individuals over 60 who don't qualify for benefits. supplemental income for unemployed.

health insurance coverage for individuals eligible to enroll in Medicare benefits.

If a firm operates in multiple states, state --------------requirements may become more complex.

income tax

Occupational privilege taxes may be imposed by Multiple choice question. state governments. sales tax authorities. federal governments. local governments.

local governments.

Post-tax deductions are comprised of Multiple select question. mandatory withholdings. occupational taxes. disability taxes voluntary withholdings.

mandatory withholdings. voluntary withholdings.

Charitable contributions are Multiple choice question. paid by the employee and remitted by the employer. paid by the employee and remitted by the employee. paid by the employer and remitted by the employer. paid by the employer and remitted by the employee.

paid by the employee and remitted by the employer.

The repayment by an employee of an advance is treated as a _____-tax deduction. Multiple choice question. post pre mandated non

post

Health insurance is an example of a *****-tax deduction.

pretax deduction

Post-tax deductions Multiple choice question. reduce employee tax liability. increase employee tax liability. increase employee net pay. reduce employee net pay.

reduce employee net pay.

A form used to track all employee deductions to ensure accuracy of employee pay is called a payroll ------

register

Charitable contributions are Multiple select question. reported on the employee's itemized tax return. reported on the employer's taxes. deducted post-tax. deducted pre-tax.

reported on the employee's itemized tax return. deducted post-tax.

Employees may be subject to Multiple select question. state unemployment insurance. state income taxes. state disability taxes. state privilege taxes.

state income taxes. state disability taxes.

Court ordered garnishments can be for Multiple select question. student loans. alimony. union dues. child support.

student loans. alimony. child support.

After computing employee gross pay, the next step is to Multiple choice question. add pre-tax additions. compute employee net pay. subtract pre-tax deductions. compute taxes to be withheld.

subtract pre-tax deductions.

Publication 15 provides employers information on the amount of -------------- to be withheld.

tax

The percentage method calculates withholding amounts based upon Multiple choice question. wage-bracket calculations. Publication 44. tiered deduction level. tiered income level.

tiered income level.

Once the employer has computed the employee's gross pay, the next step is Multiple choice question. to deducted mandatory, voluntary, and mandated amounts. to report employee pay to governmental authorities. to disburse employee pay immediately.

to deducted mandatory, voluntary, and mandated amounts.

Employee deductions for union dues are considered Multiple choice question. representation in the union. a tax deduction for the employee. mandatory. voluntary.

voluntary.