Income Tax ll - Chapter 10

To what amount of employer tax accumulation does the one-day deposit rule apply

$100,000

Carlos earned a total of $225,000 for 2018. How much in FICA tax will his employer be required to withhold in his name

$128,400 × 6.2% = $7,960.80 in OASDI; $225,000 × 1.45% = $3,262.50; plus, the 0.9% additional Medicare Tax Withholding × $25,000 excess wages = $225.00 for a total amount of $11,448.30.

Ely is single and is paid $1,240 per week and claims one allowance. What is the amount of federal income tax withheld on Ely's gross wages for the week?

$163

Household employees are subject to FICA withholding if they are paid at least what amount during 2018?

$2,100

Marla is married, is paid $3,125 semimonthly, and claims four withholding allowances. What is the amount of federal income tax withheld on Marla's gross wages for the semimonthly period?

$218.41.

Employees claim withholding allowances on Form W-4. Each withholding allowance claimed lowers their annual withholding base by what amount for calendar year 2018?

$4150

Carol works for ABC Company and earned $63,000 for the entire year 2018. How much in FUTA tax is her employer required to withhold in her name? Assume that the employer receives the maximum credit for state unemployment taxes.

$42.00

Employers are required to deposit FUTA taxes when their liability exceeds:

$500

Employers pay a maximum federal unemployment tax of 6.0% on how much of an employee's taxable wages for 2018?

$7,000

What is the penalty for sending a required tax payment (unless specifically allowed) directly to the Internal Revenue Service?

10%

Adam received a bonus of $5,000 from his employer. Which one of the following federal income withholding tax amounts is not in accordance with IRS rules regarding supplemental wage payments? Adam earns biweekly wages of $4,000, is single, and claims one allowance. Assume his employer uses the percentage method of withholding

All of the options are correct except $1,575.84. If taxes have already been withheld from his regular pay, the amount of taxes for his bonus paid during the pay period but on a different day cannot be taxed separately from his regular pay.

Carmen earned $75 in tips in September. When must she inform her employer of her tips on Form 4070 for federal income tax and FICA withholding purposes?

By October 10.

Carlos has two jobs; he is an attorney (not a partner) in a law firm and he has a small legal practice (sole proprietorship) providing real estate legal services. How does he compute his federal income tax for the year

His wages from the law firm are taxed as an employee, and his earnings from his private practice are taxed as a self-employed proprietor.

Dewoun has two jobs, and both employers withheld FICA tax. From his first job, he earned $102,100, and from his second job, he earned $30,300. How much can Dewoun claim as an additional payment on his Form 1040 as excess social security paid in 2018

Each employer is required to withhold FICA tax. If the total amount of OASDI earnings is over $128,400, the excess OASDI tax withheld from the employers is claimed as additional payments on Form 1040 of the taxpayer. Dewoun would look at his W-2 statements to get this information. $102,100 + $30,300 = $132,400; $132,400 − $128,400 = $4,000 × 6.2% = $248.00.

Adenike has two jobs and earned $110,000 from her first job and $20,000 from her second job. How much total FICA taxes will Adenike have withheld from her wages from working two jobs?

Each employer is required to withhold FICA taxes for each employee. Therefore, the total FICA taxes withheld from Adenike will be $130,000 × 7.65% = $9,945.00. If the amount of earnings subject to social security tax exceeds the $128,400 threshold, the employee will claim this as additional payments on the Form 1040.

In a large food or beverage establishment, any tip shortfall from a directly tipped employee is recorded on the employee's W-2 as:

W-2 box 8—Allocated tips.

On January 3, 2018, Jane employed a part-time household worker in her home. She paid the household worker $350 per month for 2018. What amount of FICA tax is Jane required to record on Schedule H?

Jane must pay 15.3% total FICA tax on $4,200 of earnings for her part-time household worker in the amount of $642.60. Jane will file Schedule H with her Form 1040.

Adrienne is a self-employed attorney. She has net earnings (profit) from her practice of $106,800. Her self-employment taxes for the year are:

Only 92.35% of the net earnings from self-employment are taxed at the 15.3% rate. $106,800 × 92.35% = $98,629.80 × 15.3% = $15,090.36

Lauer Company started its business on July 24, 2018. On August 10, it paid wages for the first time and accumulated a tax liability of $48,000. On Friday, August 17, it incurred a tax liability of $52,000. How is Lauer Company treated as a depositor?

Semiweekly because its accumulated tax liability is $100,000.

Erica earned $129,800 during 2018. How much will her employer withhold from her, in total, for FICA taxes?

Social Security tax calculated at $128,400 × 6.2% = $7,960.80 + Medicare tax calculated at $129,800 × 1.45% = $1,882.10. The total FICA taxes withheld from Erica is $9,842.90

An employer will prepare Schedule B of Form 941 under which circumstances?

The employer is a semiweekly depositor.

A semiweekly schedule depositor's payroll period ends and is paid on Friday, June 24. The depositor (employer) must deposit the federal taxes for this pay period on or before

The following Wednesday.

A taxpayer with 2018 AGI of $160,000 has no income tax withholding and is required to pay estimated taxes. The taxpayer can avoid an underpayment penalty by paying:

The safe harbor percentages are different if the taxpayer earned $150,000 or less ($75,000 or less if married filing separately) or more than $150,000 ($75,000 if married filing separately). In this situation the taxpayer must remit at least 90% of the 2018 tax liability ratably over four quarterly payments