Accounting Chapter 11

Employers usually record social security taxes in the accounting record at the end of the...

a. each payroll period

State unemployment taxes are filed...

b. quarterly

Which tax is paid equally by the employee and employer?

c. social security tax

The federal unemployment taxes are reported on...

d. form 940

What is the purpose of Form W-2?

provides info to enable the employees to complete their federal income tax return.

How does a favorable experience rating affect the state unemployment tax rate?

reduces the rate of SUTA tax that must actually be paid

What is the purpose of Form 941?

shows income taxes withheld, social security and medicare taxes due for the quarter, and tax deposits. due

Why is it important for workers' compensation wages to be classified according to the type of work performed?

the amount of the premium depends on the type of work the employee performs

Who pays the federal unemployment tax? The state unemployment tax?

the employer pays FUTA. usually employer pays SUTA but in some states they levy SUTA on employees

How does a business deposit federal payroll taxes?

through the EFTPS (Electronic Federal Tax Payment System)

Unemployment insurance program

A program that provides unemployment compensation through a tax levied on employers.

Experience Rating System

A system that rewards an employer for maintaining steady employment conditions by reducing the firm's state unemployment tax rate.

Wage and Tax Statement, Form W-2

Preprinted government firm that contains information about an employee's earnings and tax withholdings for the year.

Transmittal of Wage and Tax Statements, Form W-3

Preprinted government form submitted with Forms W-2 to the Social Security Administration.

Employer's Quarterly Federal Tax Return, Form 941

Preprinted government form used by the employer to report payroll tax information relating to social security, Medicare, and employee income tax withholding to the Internal Revenue Service.

Employer's Annual Federal Unemployment Tax Return, Form 940

Preprinted government form used by the employer to report unemployment taxes for the calendar year

Merit Rating System

See Experience Rating System.

Withholding Statement

See Wage and Tax Statement, Form W-2