Payroll Chapter 3

False

A monthly depositor is one who reported employment taxes of $50,000 or more for the four quarters in the lookback period.

True

A worker hired by the federal government in 2015 is covered under FICA.

True

All employers of one or more persons must file an application for an identification number.

False

An employer's social security and withheld income taxes for the quarter are less than $2,500. The employer must deposit the taxes at its bank at the time of filing the fourth quarter Form 941.

May 12

Ashe, an employer, has made timely deposits of FICA taxes and withheld income taxes during the first quarter of 2015. The latest date on which she may file Form 941 is:

2% of the undeposited taxes.

Barr fails to make a timely deposit of FICA taxes and withheld income taxes until 5 days after the due date. The penalty facing Barr is:

44th pay ($117,00 / $2,700)

Beginning with the first pay of the year, Carson will make $2,700 each week. In which numbered pay of the year will Carson hit the OASDI taxable limit?

True

Businesses with $2,500 or less in quarterly tax liabilities can pay the taxes when they file Form 941.

a. OASDI: $36.28 ($585.15 x 6.2%) b. HI: $8.48 ($585.15 x 1.45%)

Crow earned $585.15 during the week ended March 1, 20--. Prior to payday, Crow had cumulative gross earnings of $4733.20. a. The amount of OASDI taxes to withhold from Crow's pay is? b. The amount of HI taxes to withhold from Crow's pay is:

a. OASDI: $80.60 ($1300 x 6.2%) b. HI: $19.50 ($1345 x 1.45%)

Dee is paid $1345 on November 8, 20--. Dee had cumulative gross earnings, including overtime pay, of $115,700 prior to this pay. a. The amount of OASDI taxes to withhold from Dee's pay is: b. The amount of HI taxes to withhold from Dee's pay is:

True

Dismissal pay is considered taxable wages under FICA.

a. 50th week: $142.60(OASDI $2300 x 6.2%) / $33.35 (HI $2300 x 1.45%) b. 51st week: $123.00 (OASDI $117,000 - (2,300 x 50) x 6.2%) / $33.35 c. 52nd week: $$0.00 (OASDI) / $33.35

During 20--, Garr was paid a weekly salary of $2,300. The amount of FICA to be withheld from the following payments is a. For the 50th week b. For the 51st week c. For the 52nd week

Value of meals furnished employees for the employer's convenience

Each of the following items is accurately defined under FICA as taxable wages except:

True

Each year, the FICA (OASDI portion) taxable wages base is automatically adjusted whenever a cost of living raise in social security benefits becomes available.

a. OASDI: $44.64 ($720 x 6.2%) b. HI: $10.44 ($720 x 1.45%)

Eager, a tipped employee, reported to his employer that he had received $320 in tips during March. On the next payday, April 3, he was paid his regular salary of $400. a. The amount of OASDI taxes to withhold from Eager's pay is? b. The amount of HI taxes to withhold from Eager's pay is?

True

Employees are liable for their FICA taxes only until the taxes have been collected from their pay by their employer.

True

Employees may use Form 4070 to report the amount of their tips to their employers.

True

Employees of a state government hired before January 1, 2986, and covered by a public retirement plan, are exempt from FICA coverage.

True

Employer payments made directly to employees in lieu of health insurance coverage are taxable wages.

True

Employers do not pay payroll taxes on payments made to independent contractors.

True

Employers file Form 941 with the IRS center of the region in which the employer's principal place of business is located.

True

Employers who fail to file employment tax returns are subject to both civil and criminal penalties.

False

Exempt educational assistance includes payments for tools that employees keep after they complete a course of instruction.

Partners

FICA defines all of the following as employees except: a. vice presidents b. partners c. superintendents d. full-time life insurance salespersons e. payroll managers

Total cash tips of $15 received by a tipped employee in May

FICA defines all of the following as wages except:

True

FICA defines wages as including the cash value of meals provided for the convenience of the employees.

False

FICA does not consider the first 6 months of sick pay as taxable wages.

Federal government secretaries hired in 1990

FICA excludes from coverage all of the following kinds of employment except

True

FICA includes partnerships in its definition of employer.

$42,500 ($117,000 - $74,500)

Fess receives wages totaling $74,500 and has net earnings from self-employment amounting to $51,300. In determining her taxable self-employment income for the OASDI tax, how much of her net self-employment earnings must Fess count?

False

Form 941 is due on or before the 15th day of the month following the close of the calendar quarter for which the return is made.

True

Form 941 is used by employers to make their quarterly return of FICA taxes and withheld income taxes.

False

Form 944 (annual form) can be used by all new employers instead of Form 941.

True

If an employee, who works 2 or more separate jobs, pays OASDI taxes on wages in excess of the taxable wage base, the employee is entitled to a refund of the overpayment.

True

If an employer fails to file an employment tax return on the due date, a penalty based on a certain percentage of the amount of tax required to be reported may be added to the tax.

True

If the accumulated employment taxes during a quarter are less than $2,500, no deposits are required.

False

In computing their own FICA taxes, employers may exclude the total amount of tips reported to them by their tipped employees.

False

In its definition of employee, FICA clearly distinguishes between classes or grades of employees.

a. OASDI: $5,276.26 ($85,100.90 x 6.2%) b. HI: $1,233.96 ($85,100.90 x 1.45%)

In this pay, Moss Company deducted OASDI taxes of $5,276.24 and HI taxes of $1233.95 from the $85,100.90 of taxable wages paid. What is Moss Company's portion of the ss taxes for: a. OASDI b. HI

a. August 15 b. $60.50 ($1,210 x 5%) c. $6.05 ($1,210 x 0.5%) d. $0.90 ($1,210 x 3% x 9/365)

Jax Company's (a monthly depositor) tax liability (amounts withheld from employees' wages for federal income tax and FICA tax plus the company's portion of the FICA tax) for July was $1,210. No deposit was made by the company until August 24, 20--. Determine: a. the date by which the deposit should have been made. b. the penalty for failure to make timely deposit c. the penalty for failure to fully pay tax when due d. the interest on taxes due and unpaid(assume a 3% int. rate)

True

Monthly depositors are required to deposit their taxes, by the 15th day of the following month.

False

Nonagricultural employers who withhold income taxes and are liable for social security taxes must file a monthly tax and information return.

False

Noncash items given to household employees by their employers are subject to FICA tax.

False

OASDI taxes are levied when the wages are earned by, rather than when paid to, employees.

a. OASDI: $43.93 ($708.50 x 6.2%) / HI: $10.27($708.50 x 1.45%) b.OASDI: $43.93 / HI: $10.27

On August 1, Huff (part-time waitress) reported on Form 4070 the cash tips of $158.50 that she received in July. During August, Huff was paid wages of $550 by her employer. Determine: a. The amount of ss taxes that the employer should withhold from Huff's wages during August b. The amount of employer's ss taxes on Huff's wages and tips during August

True

On Form 941, the employer does not show the date of each tax deposit during the quarter.

a. OASDI: $102.30 ($1650 x 6.2%) b. HI: $23.93 ($1650 z 1.45%)

On the last weekly pay of the first quarter, Lorenz is paid her current pay of $90 per day for four days worked and one sick day (total $450). She is also paid her first-quarter commission of $1,200 in this pay. How much will be deducted for a. OASDI tax b. HI tax

True

Payments made to a worker's spouse for hospital expenses in connection with an accident disability are not considered wages under FICA.

True

Peter, age 17 and employed by his family-owned corporation, is covered under FICA.

$12,194.10 [$79,700 x (12.4% + 2.9%)]

Ralston is the sole proprietor of Cut & Curl. During the year, his net earnings were $79,700. What are his self-employment taxes (OASDI and HI) on these earnings?

True

Self-employed persons include their self-employment taxes in their quarterly payment of estimated federal income taxes.

False

State and local government employers must make their tax deposits according to a different schedule than private employers.

True

The FICA tax rates and taxable wage bases are exactly the same for employees and employers.

none of the above

The FICA tax rates for the self-employed are: a. 6.2% (OASDI) and 1.45%(HI) b. 12.4% (OASDI) and 1.45%(HI) c. 6.2% (OASDI) and 2.9%(HI) d. 10.0% (OASDI) and 1.0%(HI) e. none of the above

False

The Federal Insurance Contributions Act levies a tax upon the gross earnings of self-employed persons.

The maximum amount of wages during a calendar year that is subject to the OASDI tax.

The OASDI taxable wage base is correctly defined as:

False

The Social Security Act does not require self-employed persons to have an account number.

False

The Social Security Act requires workers to obtain a new account number each time they change jobs.

True

The employees of a semiweekly depositor are paid every Tuesday. The accumulated payroll taxes must be deposited on or before the following Friday.

False

The highest paid executives of a firm are excluded from coverage under the Federal Insurance Contributions Act (FICA)

True

The requirements for depositing FICA taxes and income taxes withheld from nonagricultural employees' wages vary according to the amount of such taxes reported during a "lookback period."

All of the above

The taxes imposed under the Social Security Act consist of: a. two taxes on employers b. two taxes on employees c. OASDI and HI taxes d. taxes on the net earnings of the self-employed e. all of the above

More than $50,000

To be designated a semiweekly depositor, how much in employment taxes would an employer have reported for the four quarters in the lookback period?

False

Under FICA only, cash tips of more than $100 in a month are defined as taxable wages.

False

Under SECA, all of an individual's self-employment income is counted in determining the OASDI tax.

False

Under the safe harbor rule, when employers deposit their tax liabilities, they may have a shortfall of no more than $200 without incurring any penalty.

The taxes must be deposited on or before November 15.

Which of the following deposit requirements pertains to a monthly depositor who has accumulated employment taxes of $2,900 at the end of October?

The taxes must be deposited by the close of the next banking day.

Which of the following deposit requirements pertains to a nonagricultural employer who has employer FICA taxes and withheld employee FICA taxes and income taxes of $125,000 at the end of payday on Friday, August 14?

The taxes must be deposited on or before Friday, May 22.

Which of the following deposit requirements pertains to a semiweekly depositor who has accumulated employment taxes of $17,500 on payday, Saturday, May 16?

Wage supplements to cover difference between employees' salaries and their military pay

Which of the following payments are not taxable for FICA?

The employee's liability for the FICA taxes continues even after the employer has withheld them.

Which of the following statements does not describe an employee's FICA taxes and withholdings?