Payroll Chapter 4

The cash value limit on achievement awards in accordance with a qualified plan is: Multiple choice question. $1,600 annually $2,000 annually $1,600 monthly Unlimited

$1,600 annually

Under the unsafe conditions rule, the charge to the employee is _______ per use. Multiple choice question. $1.25 $1.50 $1.75 $2.00

$1.50

If the cash value of prizes and awards exceeds $------------ annually in accordance with a qualified plan, the excess is subject to tax.

1600

Employers may exclude up to $______ from employee wages for other transportation benefits. Multiple choice question. 260 150 265 270

270

All of the following are examples of includible medical expenses under a flexible spending arrangement except: Multiple choice question. Wheelchairs Cosmetic surgery Chiropractor visits Hearing aids

Cosmetic surgery

What are the two elements that must be present for employer-provided refreshments to become taxable for the employee? Multiple select question. Employees receive food at no additional charge. It is provided occasionally. It is provided routinely. Employees must pay to partake in the food.

Employees receive food at no additional charge. It is provided routinely.

Employer contributions to HSA's are tax exempt for each of the following: Multiple select question. State income taxes FICA taxes Federal income taxes SUTA taxes

FICA taxes Federal income taxes

All gift cards awarded to an employee by an employer are considered de minimis. True false question. True False

False

True or false: All amounts pertaining to voluntary benefits, regardless of when the benefit is made available, must be withheld when the benefit is made available to the employee. True false question. True False

False

True or false: Post-tax deductions are mandatory and help to determine the income subject to withholding taxes. True false question. True False

False

Employer contributions to HSA's are tax exempt for each of the following: Multiple select question. SUTA taxes State income taxes Federal income taxes FICA taxes

Federal income taxes FICA taxes

A type of cafeteria plan which assists in the payment of medical expenses is called a: Multiple choice question. Flexible spending arrangement Health care cost arrangement Co-payment spending arrangement Premium only arrangement

Flexible spending arrangement

A type of cafeteria plan that can only be used in conjunction with a cafeteria plan by employees who have a high deductible health plan to pay qualified medical expenses is a: Multiple choice question. Health Savings Account Section 125 Health Plan Flexible Spending Account High Deductible Health Account

Health Savings Account

Which are some of the most common benefits errors? Multiple select question. Benefits claimed correctly Incorrectly defined compensation Errors in employee vesting Incorrect use of hardship distributions

Incorrectly defined compensation Errors in employee vesting Incorrect use of hardship distributions

How does the pre-tax deduction for qualified health insurance plans affect employees? Multiple choice question. It reduces the employee's FICA tax It increases the employee's income tax It decreases the employee's income tax

It decreases the employee's income tax

Supplemental health and disability coverage would be considered pre-tax when which of the following are met (select all that apply)? Multiple select question. Meets Ruling 2004-55 requirements Meets code 104(a)(4) requirements Meets Ruling 2005-44 Meets code 104(a)(3)

Meets Ruling 2004-55 requirements Meets code 104(a)(3)

On-site athletic facilities which are restricted to use by employees only is considered a: Multiple choice question. Taxable benefit Cost-to-employee benefit Nontaxable benefit Taxable benefit for income taxes only

Nontaxable benefit

Business use of a company car is considered to be a: Multiple choice question. Nontaxable fringe benefit because it specifically benefits the company Nontaxable fringe benefit because it specifically benefits the employee Taxable fringe benefit because it specifically benefits the employee Taxable fringe benefit because it specifically benefits the company

Nontaxable fringe benefit because it specifically benefits the company

Which of the following are considered other transportation benefits, according to the IRS (select all that apply)? Multiple select question. Car-sharing services (Zipcar, etc.) Parking subsidies Commuter passes Access to commuter vehicles

Parking subsidies Commuter passes

Amounts deducted from employee pay after income taxes and FICA taxes have been withheld are called deductions.

Post Tax

A cafeteria plan that allows for premium deductions on a pre-tax basis is called a ------------only plan.

Premium

Which IRS publication contains details about fringe benefit tax treatment? Multiple choice question. Publication 15-b Publication 15 Publication 15-a Publication 15-c

Publication 15-b

A Section 125 Cafeteria plan permits employers to offer employees a choice between which types of benefits? Multiple select question. Qualified benefits Cash Relocation reimbursement

Qualified benefits Cash

Which of the following are guidelines used by the IRS to determine if a health insurance plan qualifies for pre-tax status (select all that apply)? Multiple select question. Retiree health plans An employer's self-insurance plan Plans only for highly compensated employees COBRA health coverage

Retiree health plans An employer's self-insurance plan COBRA health coverage

Which of the following are examples of defined contributions plans (select all that apply)? Multiple select question. ERISA SIMPLE ETF 401(k) ESOP

SIMPLE 401(k) ESOP

Fringe benefits are noncash compensation. True false question. True False

True

True or false: The advantages of providing fringe benefits far outweighs the costs. True false question. True False

True

Any amount awarded to an employee from an employer using gift cards must be reported on Form Multiple choice question. W-2 W-4 1099

W-2

Employers must treat benefit withholdings as paid annually to guarantee that taxable benefits are reported correctly on employee----

W-2, W-2s, or W2

Under what condition(s) would a gym membership fringe benefit be taxable (select all that apply)? Multiple select question. When the employer provides membership to an off-site club at no additional cost to the employee. When the on-site gym is open to employees and the general public. When the gym is available to employees only on the employer's premises.

When the employer provides membership to an off-site club at no additional cost to the employee. When the on-site gym is open to employees and the general public.

A best practice is to document the ------------- involved in ----------------deductions in writing.

amounts or amount voluntary

The employer must treat all benefits as though it was paid on a _____ basis. Multiple choice question. per-pay-period weekly annual monthly

annual

Benefits plans should be reviewed -------------to ensure accuracy and legal compliance.

annually

Taxable fringe benefits, which increase employee pay, are valued at a(n): Multiple choice question. non-taxable transaction. arm's length transaction third length transaction. second party transaction.

arm's length transaction

The two basic types of retirement plans are defined------- and defined --------- .

benefit contribution

A FSA can be used to pay for Multiple select question. copayments. long-term care costs. Medicare taxes. prescriptions.

copayments. prescriptions.

The importance of fringe benefits can be measured in terms of --------------------------------- and long-term increases in revenue and net income

employee satisfaction

Flow-through supplemental health and disability programs are paid for by Multiple choice question. shared costs. employee. employer. government grant.

employee.

Depositing taxes for noncash fringe benefits will occasionally require an -----------of the taxes due

estimate

The general valuation rules uses -------------------- to determine the value of a benefit.

fair market value

An employer will offer ---------------------------------as a way to entice employee engagement because the benefits far outweigh the costs.

fringe benefit or benefits

The most common way to value fringe benefits is the Multiple choice question. fair market value rule general valuation rule valuation rule market value rule

general valuation rule

Pre-tax deductions reduce the amount that an employee will pay for Multiple choice question. federal unemployment taxes. voluntary deductions. mandatory deductions. income taxes.

income taxes.

Fringe benefits related to employer provided vehicles, mileage, leasing and commuting will _____ employee pay. Multiple choice question. not affect increase decrease

increase

An employee's pay advice will include all of the following information except? Multiple choice question. regular earnings taxable fringe benefits non-taxable fringe benefits employee address employee number

non-taxable fringe benefits

Fringe benefits are usually ----------compensation given to employees.

noncash

Business use of a company vehicle is --------------- because it benefits the company.

nontaxable

When an employer provides food on an---------------- basis, it is considered a de minimis benefit.

occasional

All fringe benefit deductions must be listed on the employee-----

pay advice

The IRS requires that all fringe benefits which involve a deduction from the employee pay must be listed on the employee's: Multiple choice question. federal tax form state tax form W-2 pay advice

pay advice

The IRS requires that all fringe benefits which involve a deduction from the employee pay must be listed on the employee's: Multiple choice question. pay advice W-2 federal tax form state tax form

pay advice

Premium-only plans are cafeteria plans that allow employers to deduct employee premiums on a Multiple choice question. pre-tax basis post-tax basis

pre-tax basis

The unsafe conditions rule applies to employees who normally walk, bicycle, or use ------------------transportation under normal conditions.

public

The IRS designation of -------------- health insurance plans reflects the necessity of medical care.

qualified

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

reduce employee net pay.

The employer should estimate the amount of the benefit transmitted on a -----------date, --------------taxes, and ---------------any other monies as necessary.

specific remit transmit

Fair market value is defined as Multiple choice question. the price a person would pay in a personal transaction. the price a business would pay for a fringe benefit. the price a person would pay in an arm's-length transaction. the price a person would pay to a relative.

the price a person would pay in an arm's-length transaction.

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

voluntary withholdings. mandatory withholdings.

Funds associated with employee benefits should be withheld Multiple choice question. one day after the benefit is made available. one month after the benefit is made available. when the benefit is made available.

when the benefit is made available.