ACC Federal Taxes | Chapter 9 | Review

Multiple Choice 9-14 Computing the 0.9 Percent Medicare Surtax for High-Income Taxpayers (LO 9.9) Skylar is single and earns $410,000 in salary during 2015. What is the amount of Medicare surtax for high-income taxpayers that his employer must withhold from his wages?

$1,890 Math: ($410,000 - $200,000) x .9% = 1,890

Multiple Choice 9-8 Self-Employment Tax (LO 9.6) For 2015, Roberta is a self-employed truck driver with earnings of $45,000 from her business. During the year, Roberta received $2,500 in interest income and dividends of $500. She also sold investment property and recognized a $1,500 gain. What is the amount of Roberta's self-employment tax (Social Security and Medicare taxes) liability for 2015?

$6,358 Math: SS = 41,557.50 x 12.4% = 5,153.13 MC = 41.557.50 x 2.9% = 1,205.17 5,153.13 + 1,205.17 = 6,358

Multiple Choice 9-2 Withholding Methods (LO 9.1) Abbe, age 56, is married and has two dependent children over age 17. Abbe has one job, and her husband, age 58, is not employed. If she expects to earn wages of $50,000, how many allowances should Abbe claim on her Form W-4 for 2015?

5

Multiple Choice 9-13 The Nanny Tax (LO 9.8) Individual taxpayers may pay withholding taxes due with their individual income tax returns using Schedule H for each of the following workers except:

An attorney with her own business, hired to handle a legal dispute with the taxpayers' neighbor.

Multiple Choice 9-10 The FUTA Tax (LO 9.7) The FUTA tax is:

An unemployment tax with a rate as low as 0.6 percent up to $7,000 of salary per employee.

Multiple Choice 9-11 The Nanny Tax (LO 9.8) Bob employs a maid to clean his house. He pays her $1,040 during the current year. What is the proper tax treatment of the FICA and Medicare tax for the maid?

Bob is not required to pay or withhold FICA and Medicare taxes on the $1,040. Book: "Household employers are not required to pay FICA and Medicare taxes on cash payments of less than $1,900 paid to any household employee in a calendar year."

Multiple Choice 9-6 Federal Tax Deposit System (LO 9.4) Employers must file a quarterly tax return showing the amount of wages paid and the amount of income tax and FICA tax withholding due. This tax return is filed on:

Form 941

Multiple Choice 9-7 Employer Reporting Requirements (LO 9.5) Which of the following forms is used to report wages, tips and other compensation paid to employees?

Form W-2

Multiple Choice 9-4 Estimated Payments (LO 9.2) Estimated payments for individual taxpayers are due on the following dates:

Four times a year on April 15, June 15, September 15, and January 15 of the next year.

Multiple Choice 9-9 Self-Employment Tax (LO 9.6) Which of the following is NOT subject to self-employment tax?

Gain on the sale of real estate held for investment Subject to Self-Employment Tax: - Net earnings of a self-employed lawyer - Distributive share of earnings of a partnership - Net earnings of the owner of a shoe store - Net earnings of the owner of a dry cleaner

Multiple Choice 9-5 The FICA Tax (LO 9.3) Which of the following is NOT true about FICA taxes?

In 2015, the maximum wage base for Social Security tax withholding is $117,000. True: - The FICA tax has two parts, Social Security (Old Age, Survivors, and Disability Insurance) and Medicare (hospital insurance). - In 2015, there is no maximum wage base for Medicare tax withholding. - When employees work for more than one employer and exceed the maximum wage base for Social Security tax withholding in total, they are allowed a refund of excess tax withheld.

Multiple Choice 9-3 Withholding Methods (LO 9.1) Michele is single with no dependents and earns $23,000 this year. Michele claims sixteen allowances on her Form W-4 for 2015. Which of the following is correct concerning her Form W-4?

Michele's employer will submit a copy of her W-4 to the IRS if directed to do so by written notice.

Multiple Choice 9-15 Computing the 0.9 Percent Medicare Surtax for High-Income Taxpayers (LO 9.9) Christine and Doug are married. In 2015, Christine earns a salary of $250,000 and Doug earns a salary of $50,000. They have no other income and work for the same employers for all of 2015. How much Medicare surtax for high-income taxpayers will Christine and Doug have to pay with their 2015 income tax return?

None of these choices are correct.

Multiple Choice 9-1 Withholding Methods (LO 9.1) Which of the following amounts paid by an employer to an employee is not subject to withholding?

Reimbursement of expenses under an accountable plan

Multiple Choice 9-12 The Nanny Tax (LO 9.8) Which of the following employees would not be exempt from the FICA and Medicare taxes on wages paid for household work?

The taxpayer's 20-year-old sister