Chapter 9 Payroll

The employer must allocate tips to the employees if reported tips do not exceed what percent of gross sales?

8%

Which of the following statements about federal unemployment tax is true?

An employer must deposit federal unemployment tax for any quarter when the amount for the quarter plus any other amounts from previous quarters during the calendar уear exceed $500.

For individual taxpayers, what are the four instalment dates for estimated tax payments?

April 15, June 15, September 15 of the tax year, and January 15 of the next year

During 2021, Henry, age 35, decided to change jobs. Henry asked his old company to make a direct transfer of his $10,000 balance from his old company's retirement account into his IRA. To avoid paying taxes and penalties on this distribution, Henry must do which of the following?

Henry does not need to do anything.

During 2021, Henry, age 35, decided to change jobs. Henry asked his old company to give him a check for the $10,000 balance from his old company's retirement account. Since this was not a direct transfer into a new retirement account, the company withheld 20% ($2,000) as federal withholding taxes, thereby giving him a net check of $8,000. To avoid paying taxes and penalties on this distribution, Henry must do which of the following?

Henry must deposit $10,000 into another retirement plan (such as an IRA) within the 60-day rollover period

The lookback period for determining when an employer must make employment tax deposits is

July 1 of the second prior year to June 30 of the prior year

Which of the foilowing statements concerning employers' requirements for depositing employment taxes (assume no COVID relef provisions) is true?

New employers are deemed to be monthly depositors.

Which of the following is an acceptable method for determining the required estimated tax payments for an individual who has no income subject to withholding?

Payment of 90% of this year's tax liability computed by annualizing on a quarterly basis

Form W-2 is prepared with multiple copies. With whom is the original copy (Copy A) filed?

Social Security Administration

The sick leave credit is available for employers that provided sick pay to employees due to a variety of COVID-related reasons. Under which of the following reasons would the credit be no more than $200 per day?

The employee is caring for someone that has been ordered to quarantine by a government authority or health care provider.

Which of the following statements concerning Form W-2 is true?

The employer must provide Form W-2 if requested by a terminated employee, the later of 30 days of the employee's request for their Form W-2 or within 30 days after the last wage payment is made.

For a plan to be a "qualified" retirement plan, it must meet which of the following requirements?

The plan must meet certain participation and coverage requirements.

Brian is an employee for a technology business. Which form will he receive from his employer during January of the year following his year of employment?

W-2

Lawrence is a full-time gardener at Chatterly House, Inc. His employer values his services highly and has established a plan where he will retire at 80% of his current salary of $40,000. The employer makes an appropriate contribution to the plan annually. This plan is called a

defined benefit plan

To be eligible for an employee retention credit, a business was required to

have a complete or partial suspension of operations due to COVID

Raymond has a small business with only three employees. The employees each earn $35,000 per year. What is Raymond's total lability for FUTA, after paying the required state unemployment tax?

$126

What amount of tips must an employer report as allocated to emoloyees if gross food and beverage sales in the restaurant are $175.000 and the employees report no tips to the employer?

$14,000

Louise is a single taxpayer and checks the Single box on her 2021 Form W-4 and provides no other information, She is paid $2,530 monthly. Using the Wage Bracket Method, what amount should Louise's emplover withhold for federal income tax?

$162

Assuming the state also collects unemployment tax, the federal unemployment tax (FUTA) is paid by the employer up to what dollar amount of wages paid to each employee and at what rate?

$7,000 and 0.6%

Edward worked at three jobs during 2021. He earned $60,000, $56,000, and $9.000, respectively. from the jobs and daimed three allowances on each of his W-4s. What total amount of FICA (Social Security and Medicare) tax should have been withheld from Edward's wages?

$9,562.50

Brett works as a mild-mannered reporter by day and a self-employed superstar guitar hero at night. He estimates that his current taxes, including self-employment taxes, will be $13,600 based on his adjusted gross income of $60,000. Brett also estimates that his current year withholding from his job will be $4,000. His year AGI and tax liability in the prior year were $50,000 and $10,500, respectively, What is the calculation that yields the minimum amount of estimated payments that Brett newspaper should make for the current year to avoid penalties?

100% of last year's taxes

Richard has several investment accounts. His investments generate interest and dividend income, and he frequently buys and sells stocks and bonds. He may expect to receive which of the following information returns?

1099-INT, 1099-B, and 1099-DIV