POST TEST PURRR

-Only until 9:00 p.m. when school is not in session Under the FLSA, when school is not in session, 14 and 15-year-old employees can only work between 7:00 a.m. and 9:00 p.m. When school is in session, 14 and 15-year-old employee can only work between 7:00 a.m. and 7:00 p.m. and cannot work during school hours.

A 15-year-old employee works part-time. Under the FLSA, what hours can the employee work? -More than 40 hours per week when school is not in session -Only between the hours of 7:00 pm and 9:00 pm when school is in session -More than eight hours per day when school is in session -Only until 9:00 p.m. when school is not in session

d. There is no limitation on the number of hours that can be worked during the week. The FLSA does not limit the number of hours that can be worked by employees 16-years of age or older. State child labor laws may limit the number of hours for employees who are 16-years of age.

A 16-year-old employee works part-time during the summer. Under the FLSA, what are the maximum hours, if any, the employee can work during a workweek? a. 8 hours per day b. 18 hours per week c. 40 hours per week d. There is no limitation on the number of hours that can be worked during the week.

The correct answer is: $60.20 When calculating the value of excess GTL, first exclude the first $50,000 of coverage, then divide the excess coverage by $1,000 before multiplying the rate based on the employee's age.

A 56-year-old employee is provided $190,000.00 in group-term life insurance. Using IRS Table I Uniform Premiums for GTL which is located in Tables and Rates on the toolbar, calculate the monthly taxable value of this coverage.

-honor the qualified medical child support order. All states have passed laws allowing courts to require medical child support as part of a child support order. All employer-sponsored group health plans are required to comply with state laws regulating medical child support and to honor "qualified medical child support orders."

A National Medical Support Notice requires an employer to: -forward the order to insurance provider to contact the employee. -do nothing. Employers are not obligated to comply with Medical Support Notices. -instruct the employee to purchase a separate health insurance policy for the child. -honor the qualified medical child support order.

-funds are transferred to the account when items are presented for payment. A Zero Balance Account is unique in that funds are transferred to the account when items are presented for payment to facilitate banking relationships.

A Zero Balance Account is unique in that: -it prevents fraudulent payments. -it is only used for payroll checking accounts. -funds are transferred to the account when items are presented for payment. -reconciliations of these accounts are not necessary.

-benefit exchange dollars. IRS rules allow Section 125 cafeteria plans and other flexible benefit plans providing qualified benefits to be funded with flex dollars or flex credits, salary reductions, or after-tax employee contributions.

A cafeteria plan may be funded by any of the following EXCEPT: -benefit exchange dollars. -flex dollars or flex credits. -salary reduction. -after-tax employee contributions.

The correct answer is: $772.82 Under the CCPA, disposable earnings are determined by subtracting all deductions required by law from an employee's gross earnings. Deductions required by law include federal income, state income, local income, social security and Medicare taxes.

A company has received a child support order for an employee earning $852.00 semimonthly. Deductions include $14.00 for federal income tax, $65.18 for social security and Medicare taxes, $30.00 for a creditor garnishment, and a $25.00 credit union payment. Calculate the employee's disposable pay.

-EFTPS-Through a Financial Institution. When initiating a tax deposit through its bank, a company uses EFTPS Through a Financial Institution (EFTPS Credit). When initiating a tax deposit with the IRS, a company uses EFTPS Direct (EFTPS Debit). The electronic tax application deposit method uses the Federal Reserve wire transfer methodology.

A company making its federal tax deposits via EFTPS has elected to have its bank initiate the transactions. This method is defined as: -Direct Deposit. -EFTPS-Direct. -EFTPS-Through a Financial Institution. -Electronic Tax Application.

-reducing human error. A properly configured and maintained computerized payroll system can increase the accuracy of employee paychecks by reducing human error. If the system is not set up correctly, the calculation of an employee's pay may be incorrect and the reports produced may be incorrect.

A computerized payroll system can increase the accuracy of employee paychecks by: -providing reports detailing the calculations. -reducing human error. -making multiple calculations very quickly. -making multiple calculations in the same way.

-liability in a deposit period is $50,000.00. Normally an employer's deposit schedule only changes at the beginning of the year based on the prior lookback period. However, monthly depositors incurring a liability of $100,000.00 or more during a monthly deposit period become semiweekly depositors for the remainder of that calendar's year and the next year.

A monthly depositor becomes a semi-weekly depositor in all of the following situations EXCEPT when the: -liability in a deposit period is $50,000.00. -liability in a deposit period exceeds $100,000.00. -lookback period amount exceeds $50,000.00. -lookback period amount exceeds $200,000.00.

-contractual bonus paid based on the employee's production, efficiency or other measure of performance. A nondiscretionary bonus is a contractual bonus paid based on the employee's production, efficiency or other measure of performance.

A nondiscretionary bonus is a: -benefit plan provided to all employees. -contractual bonus paid based on the employee's production, efficiency or other measure of performance. -gift provided at a holiday. -non-contractual profit-sharing bonus.

-assurance. Assurance, one of the five principles of customer service, demonstrates the knowledge and courtesy shown to customers along with the ability to convey trust, competence, and confidence.

A payroll staff member responds to an employee's request for information by saying that he does not know the answer but will look it up and get back to the employee. This is an example of the customer service principle of: -empathy. -reliability. -assurance. responsiveness.

-accounting department reconcile the payroll bank account. An internal control that a one-person payroll department can implement is having the payroll bank account reconciled by the accounting department. A company does not have sufficient internal controls when check stock and the check signing machine are in the same location, and when the payroll department reconciles the payroll bank account.

A procedure that can be put into place in a one-person payroll department to ensure adequate controls is to have the: -accounting department reconcile the payroll bank account. -payroll professional reconcile the payroll bank account. -checks and check signer in the same location. -same person issue paychecks and reconcile the payroll bank account.

b. on or before the Wednesday following the payday Semiweekly depositors incurring a liability less than $100,000.00 during the Wednesday, Thursday, and/or Friday deposit period must deposit the liability by the next Wednesday (three business days after the end of the deposit period).

A semiweekly depositor's payday is Friday. If the company's tax liability for a pay period is $60,000.00, the company's payroll tax deposit is due: a. by the next business day following the payday. b. on or before the Wednesday following the payday. c. on or before the next Friday following the payday. d. by the 15th day of the following month after the payday.

Under IRS rules, students holding F, J, or Q visas, performing work to further the purpose for which they entered the U.S., are exempt from social security and Medicare tax.

A student who is performing work to further the purpose for which he entered the U.S. is exempt from social security and Medicare tax when holding which of the following type(s) of visas? a. F only b. J only c. Q only d. F, J, or Q

-tax treaties. The U.S. currently has tax treaties with more than 60 foreign countries designed to avoid double taxation of income when individuals work in one country and are subject to income taxation in their country of citizenship. Totalization agreements are similar to tax treaties except they only apply to social taxes (social security and Medicare taxes in the U.S).

Agreements between the U.S. and foreign countries designed to avoid double taxation of income are called: -foreign earned income exclusions. -totalization agreements. -tax treaties. -bona fide residence agreements.

-$10 gift card. Under IRS rules, no-additional-cost services are nontaxable. Cash payments, such as back-pay awards, group-term life insurance in excess of $50,000, and and all reimbursements for relocation-related moves are taxable.

All of the following benefits are taxable fringe benefits EXCEPT: -employer reimbursements for relocation-related mileage. -$10 gift card. -company-provided group-term life insurance in excess of $50,000.00. -no-additional-cost services.

-job-related educational assistance. Under IRS rules, the payment of an employee's job-related educational assistance is a working condition fringe benefit and not taxable. Cash payments, such as back-pay awards, prizes in sales contests, and third-party sick pay relative to the employer contributions are taxable.

All of the following benefits are taxable fringe benefits EXCEPT: -job-related educational assistance. -prize in company-sponsored sales contest. -back-pay awards. -third-party sick pay relative to employer's contribution.

-an itemized hotel bill when away from home for a company-sponsored conference. Under IRS rules, an employee's meals or lodging expenses paid for temporary travel away from home in an accountable plan are not taxable. In addition, the IRS rules define meals provided by employers in a relocation move and discriminatory manner on company premises are taxable.

All of the following employer-paid meals or lodging are taxable EXCEPT: -subsidized meals in the executive dining room. -an itemized hotel bill when away from home for a company-sponsored conference. -meals while moving from an old home to a new home. -staying in the company guest quarters for three months after transferring while a new house is under construction.

-defining the method and timing of pay. The FLSA regulates overtime, minimum wage, child labor, and equal pay.

All of the following items are covered by the Fair Labor Standards Act EXCEPT: -setting the minimum age for work. -defining equal pay for equal work. -setting the minimum wage. -defining the method and timing of pay.

-the employer ignored the IRS instructions. The IRS will abate penalties when the employer can demonstrate they have reasonable cause for late filing or payment when the organization can demonstrate it exercised ordinary business care, has had a history of compliance, was filing the information return for the first time, or the events causing the late payment or filing were beyond the organization's control. Employers ignoring the IRS instructions do not have reasonable cause for the failure to pay the taxes timely or file returns timely.

All of the following reasons are reasonable cause when requesting the IRS waive information return penalties EXCEPT: -this was the first time this information return was filed. -the employer ignored the IRS instructions. -the employer has a history of compliance. -the events were beyond the employer's control.

-purchasing. Payroll, human resources, personnel, benefits, and time and attendance systems share many data elements and are ideally integrated.

All the following types of records can be integrated with payroll data EXCEPT: -personnel. -purchasing. -human resources. -benefits.

The correct answer is: $39.60 When calculating federal income tax on an employee's supplemental wages when the employee's year-to-date supplemental wages are less than $1,000,000.00, use the Optional Flat Rate method and multiply the taxable supplemental wages by the Optional Flat Rate (22%).

An employee claims single with no other adjustments on a 2020 Form W-4 and is paid a production bonus of $180.00. The employee's supplemental wages for the year are $360.00. Using the Optional Flat Rate Method, calculate the amount of federal income tax to be withheld from the employee's bonus.

The correct answer is: $76.50 In the year of an employee's death, all payments are subject to social security (6.2%) and Medicare (1.45%) tax withholding and are reported in Boxes 3 and 5 on Form W-2. The recipient of the payment will receive Form 1099-MISC reporting the payments made after the employee's death.

An employee died in February with YTD wages of $2,750.00 and was owed wages of $1,000.00 which were paid on the next regular semimonthly payday. Calculate federal income, social security, and Medicare taxes, if any, to be withheld.

-The employee drove more personal than business miles, and the value of all miles are included in income. When using the cents-per-mile valuation method, the taxable amount is calculated by multiplying the IRS' standard business mileage rate ($0.560 in 2021) by the personal miles driven. However, the cents-per-mile method cannot be used when the value of the vehicle exceeds the luxury vehicle value ($51,100.00 in 2021). The fact that an employee drives more miles for personal use than business uses has no bearing on the amount included in the employee's income. Employers have the option to withhold federal income tax on the value of personal use, but must withhold social security and Medicare taxes.

An employee drove a company vehicle 5,000 miles for business, 3,000 for commuting, and 6,000 miles for personal use. The car is valued at $52,700.00. Which of the following statements regarding the employee's use of the vehicle is true? -Using the cents-per-mile method, the employee's personal use of the vehicle is valued at $3,360.00. -The employee drove more personal than business miles, and the value of all miles are included in income. -The employer must withhold federal income tax on the personal use of the vehicle. -Of the safe-harbor valuation methods, the employer must use the annual lease value method to report the value of the employee's personal use of the vehicle.

The correct answer is: $107.10 When the employee's year-to-date wages are less than the social security wage base, multiply the taxable wages by the social security (6.2%) and Medicare (1.45%) tax rates to calculate the social security and Medicare taxes to withhold.

An employee earns $1,400.00 biweekly and has $25,500.00 in total YTD wages. Calculate the social security and Medicare taxes to be withheld from the employee's biweekly pay.

The Answer is: $23.23. Use Worksheet 2 from Publication 15-T: -Step 1: Adjust the employee's wage amount by reducing the gross wages by any nontaxable wages. Since there are no entries in Step 4 of Form W-4, this is the Adjusted Wage Amount. -Step 2: Locate the Biweekly Payroll Period table. Locate the row which includes $3,200. Move to the column for Married Filing Jointly, Standard withholding to determine the tentative withholding amount. -Step 3: In Step 3 of Worksheet 2, divide the amount in Step 3 of Form W-4 by 26 ($6,000/26 = $230.77) and subtract from the tentative withholding amount to get the answer. -Step 4: Nothing is reported on Form W-4, Step 4(c) so skip Step 4 of the worksheet. The amount in Step 3, Line 3c is the amount to withhold from the employee's wages this pay period.

An employee earns $3,200 biweekly and claims Married Filing Jointly with 3 dependents under the age of 17 on a 2021 Form W-4 ($6,000 in Step 3). Using the Wage Bracket Method, calculate the employee's biweekly federal income tax withholding.

-The employer can use the amount to offset any administrative expenses in connection with the program. Any amount in a health FSA that remains unused at the end of the plan year generally is forfeited by the employee. When an employee loses contributions at the end of the grace period due to the failure to incur eligible expenses, the employer may use the lost amounts to cover administrative expenses or allocate it on a uniform basis to eligible employees for the next plan year. When using the $550 carryover provision for unused amounts, the cafeteria plan must be amended. If the unused amount is paid to the employee, it is included in the employee's income.

An employee has elected to have $200.00 per month contributed to a medical flexible spending account. At the end of the plan year's grace period, $100.00 remains in the account. What happens to the $100.00? -The amount becomes taxable income. -The amount can be carried over to the next plan year without amending the plan. -The amount can be received in cash without taxation. -The employer can use the amount to offset any administrative expenses in connection with the program.

-Form W-2, in boxes 1, 3 and 5. When employees are on temporary assignment with the state National Guard or the Armed Forces Reserve, the differential military pay is reported on Form W-2, in Boxes 1, 3 and 5.

An employee is on a 21-day assignment in the National Guard or Armed Forces Reserve and receives $1,000.00 in differential military pay. The pay is reported on: -Form 1099-MISC, in box 3. -Form W-2, in boxes 1, 3 and 5. -Form W-2, in boxes 3 and 5 only. -Form 1099-MISC, in box 7.

- $21 of the reimbursement is taxable Under IRS accountable plan rules, a properly accounted for per diem reimbursement is not included in the employee's income when the per diem is equal to or less than the IRS approved per diem rate. Amounts in excess of the IRS approved per diem rate are taxable.

An employee traveled to NYC, a high cost locality, on company business. During the one-night stay the employer paid a per diem of $313 and required expenses to be documented. The employers uses the fed high/low per diem rates to reimburse the employee's travel; expenses The Tax implication to the employee, with a current high rate of $292 for travel is : -$21.00 of the reimbursement is taxable. -$292.00 of the reimbursement is taxable. -The employee has no tax implications. -The employee can deduct $313.00 from his personal income taxes.

d. $26,000.00 Under IRS rules, when the employer's plan allows catch-up contributions, the maximum employee-elected deferral for an employee age 50 or older is $26,000.00 ($19,500.00 regular deferral and $6,500.00 catch-up contribution).

An employee will turn age 50 in March and works for an employer that allows catch-up contributions to its 403(b) plan. What is the maximum employee-elected deferral that is eligible to be contributed to the 403(b) plan in 2021? a. $19,500.00 b. $20,500.00 c. $22,500.00 d. $26,000.00

The correct answer is: $32,816.67 When calculating a salaried employee's monthly wages, first determine the monthly salary and then add any additional amounts that are included in the employee's pay.

An employee with an annual salary of $125,000.00 is paid monthly. The employee also receives a $400.00 monthly car allowance and a production bonus. September's production bonus is $22,000.00. Calculate the employee's gross pay for September.

The correct answer is: $2,351.40 When an employee receives a net amount, the calculation of taxable wages requires using the gross-up formula. When grossing-up an employee's net wages, divide the desired net by 100% less the total percentage of all the employee's tax rates. $1,800.00 bonus divided by (100% - 22% FIT - 1.45% Medicare) = taxable income on the bonus.

An employee with year-to-date taxable compensation of $152,800.00 receives a $1,800.00 bonus. The employee's manager has requested that payroll gross-up the value of the bonus. There is no state or local tax withholding. Using the Optional Flat Rate Method, calculate the taxable income on the bonus.

The Answer is: $20.00. Use Worksheet 2 from Publication 15-T: -Step 1: Calculate the taxable wages: (3 hrs/day x 5 days) x $7.25 = $108.75. Using Worksheet 2 from Publication 15-T, skip to Step 2 as the employee did not report any amounts in Steps 4(a) or 4(b) of Form W-4. -Step 2: Locate the Weekly Payroll Period table. Locate the row which includes $108.75. Locate the column for Married Filing Jointly, Standard withholding to determine the Tentative Wihholding Amount. -Step 3:Skip. No entries in Step 3 of Form W-4. -Step 4: Add the amount from Step 4(c) of Form W-4 to the Tentative Withholding Amount. The result is the amount of federal income tax to withhold.

An employee works part-time, 3 hours a day, Monday through Friday, earns minimum wage, and is paid every Friday. The employee submitted a 2021 Form W-4 indicating a filing status of Married filing jointly and $20 in Step 4(c). Using the Wage Bracket Method, caclculate the employee's federal income tax withholding for the week.

b. All three require authorization All voluntary deductions require authorization by the employee with the exception of union dues where a collective bargaining agreement requires the deduction.

An employer offers to withhold payments for health insurance, union dues, and charitable contributions as part of the company benefit plan. Which, if any, of these deductions require an employee authorization to withhold? a. Charitable contributions only b. All three require authorization c. Health insurance and charitable contributions only d. Union dues only

The correct answer is: $17,500.00 Under IRS rules, moving expenses are no longer considered qualified. Therefore, all expenses reimbursed for relocation-related moves are taxable.

An employer transferred an employee in a relocation-related move and reimbursed the employee's moving expenses. The employee spent $2,000.00 on house hunting, $5,000.00 to move household goods, $500.00 for airfare to travel to the new location, and $10,000.00 in real estate commissions to sell the house. Calculate the amount of taxable moving expenses.

The correct answer is: $1,230.22 Under the CCPA, disposable earnings are determined by subtracting all deductions required by law from an employee's gross earnings. Deductions required by law include federal income, state income, local income, social security and Medicare taxes.

An exempt employee earns $1,435.00 semimonthly. The employee's deductions include $95.00 for income tax, $109.78 for social security and Medicare taxes, $150.00 for court-ordered child support, and $50.00 for a state tax levy. Calculate the employee's semimonthly disposable earnings.

prefers facts over speculation and prefers detailed advanced planning.

An individual with an assertive communication style is described as one who: enjoys speculating on possibilities before getting down to the facts. is most interested in how an idea will affect other people. wants things arranged logically in beginning-to-end sequences. prefers facts over speculation and prefers detailed advanced planning.

An individual with an introspective communication style prefers points to be arranged logically in beginning-to-end sequences and is interested in the principles involved and cost/benefit analysis.

An individual with an introspective communication style is described as one who: -prefers facts over speculation and insists on real-world proof. -wants things arranged logically in beginning-to-end sequences. -enjoys speculating on possibilities before getting down to the facts. -is most interested in how an idea will affect other people.

The correct answer is: $81.20 Determine if the employee's year-to-date wages are less than the social security wage base. If the year-to-date wages are less than the social security wage base ($142,800.00), multiply the taxable wages by the social security (6.2%) and Medicare (1.45%) tax rates. If the year-to-date wages are greater than the social security wage base, multiply the taxable wages only by the Medicare tax rate to calculate the Medicare taxes to withhold.

As of December 1, an employee had earned $190,100.00 in salary, commissions, and bonuses. The employee's semimonthly salary is $5,600.00. Calculate the social security and Medicare taxes to be withheld from the employee's first pay in December.

d. $1,267.28 The total cost of payroll is not only gross wages, but also includes employer taxes (social security, Medicare, federal and state unemployment), plus employer contributions to retirement plans, such as 401(k).

Based on the following information, calculate the total cost of payroll: Gross wages $1,100.00 401(k) contribution $110.00 Cafeteria Plan $150.00 Federal income tax $175.00 Social security tax $58.90 Medicare tax $13.78 State income tax $50.00 Charitable contribution $35.00 Employee stock purchase $50.00 Net pay $457.32 401(k) employer match $55.00 FUTA $6.60 SUI $33.00 a. $457.32 b. $1,100.00 c. $1,194.60 d. $1,267.28

d. $1,172.98 When calculating an employee's net pay, the first step is to calculate the employee's gross pay (for nonexempt employees, the overtime premium is included). The second step is to calculate any pre-tax deductions. The third step is to calculate the appropriate taxes. The fourth step is to calculate any other deductions that the employee has. After the gross, pre-tax amounts, taxes, and other deductions have been determined, the employee's net pay can be calculated. For FITW, use Worksheet 1 from Publication 15-T.

Calculate an employee's net pay based on the following information. Paid weekly -Hourly rate = $27.00 per hour -Hours worked = 45 -W-4 information = Married filing jointly with $4,000 in Step 3 (2 qualified children under age 17) -YTD Wages = $70,000 -Using the percentage method (Publication 15-T, Worksheet 1) a. $1,118.75 b. $1,168.58 c. $1,114.01 d. $1,172.98

d. $1,828.68 When calculating an employee's net pay, determine if the employee is exempt or nonexempt to calculate any overtime. Be sure to determine if overtime needs calculated. Also, ensure you are using the correct tables within the percentage method tables. If applicable, ensure you reduce the gross wages by the amount allotted for each allowance. For FITW, Use Worksheet 5 from Publication 15-T.

Calculate an employee's net pay based on the following information: **Paid biweekly **Hourly rate = $25.00 per hour **Hours worked week 1 = 45 **Hours worked week 2 = 38 **2019 W-4 status = Married, 2 allowances **YTD Wages = $35,000.00 **Using the *Percentage method* (Publication 15-T, Worksheet 5) a. $1,773.33 b. $1,778.46 c. $1,789.08 d. $1,828.68

c. quarterly Forms 941. The IRS and SSA require wages subject to federal income tax, federal income tax, social security and Medicare wages, and social security and Medicare taxes be in balance between Forms W-2 and 941.

Certain tools on Form W-2 must reconcile with similar totals reported on the: a. annual Form 940. b. annual Form 941. c. quarterly Forms 941. d. annual Form 945.

c. quarterly Forms 941 The IRS and SSA require wages subject to federal income tax, federal income tax, social security and Medicare wages, and social security and Medicare taxes be in balance between Forms W-2 and 941.

Certain totals on Forms W-2 must reconcile with similar totals reported on the: a. annual Form 940. b. annual Form 941. c. quarterly Forms 941. d. annual Form 945

-conducting performance reviews. Coaching helps improve the knowledge and skills employees need to perform their jobs, such as orientation of new employees, explaining policies, and conducting performance reviews. Counseling is appropriate when salaries have been frozen, employees are dealing with stress, or are unhappy.

Coaching is appropriate when: -an employee is unhappy. -handling stress and burnout. -conducting performance reviews. -salaries have been frozen.

-teaching new skills. Coaching helps improve the knowledge and skills employees need to perform their jobs, such as orientation of new employees, explaining policies, and teaching new skills. Counseling is appropriate when promotions are limited, employees have a conflict, or are unhappy.

Coaching is appropriate when: -an employee is unhappy. -two employees are in conflict. -teaching new skills. -promotion opportunities are limited.

-introducing a new procedure. Coaching helps improve the knowledge and skills employees need to perform their jobs, such as orientation of new employees, explaining policies, and teaching new skills or procedures. Counseling is appropriate during a reorganization, employees who are stressed, or are unhappy.

Coaching is appropriate when: -introducing a new procedure. -an employee is unhappy. -handling stress and burnout. -a corporate reorganization occurs.

-layoffs occur. Counseling is used by managers to help an employee resolve a personal problem affecting performance such as after a reorganization, layoffs, or when promotional opportunities are limited. Coaching is appropriate after a training session, during performance reviews, or helping an employee master a new challenge.

Counseling is appropriate when: -helping an employee master a new challenge. -layoffs occur. -following up after a training session. -conducting performance reviews.

-any legible form. The Internal Revenue Code, Fair Labor Standards Act and other laws require retained records be kept in any legible, retrievable form, including electronic storage, such as digital images of documents, microfilm, microfiche, hard copy, computer files, etc.

Data in the payroll master file must be retained in: -the original paper copy and microfilm. -any legible form. -the original paper or electronic copy. -computer records.

The correct answer is: $4,984.00 When using the cents-per-mile valuation method, the taxable amount is calculated by multiplying the IRS standard business mileage rate ($0.560 in 2021) by the personal miles driven. However, the cents-per-mile method cannot be used when the value of the vehicle exceeds the luxury vehicle value ($51,100.00 in 2021).

During 2021, an employee drove a total of 8,900 miles for personal use in a company vehicle valued at $15,000.00. Using the cents-per-mile method, calculate the value of the employee's personal use of the company vehicle.

-payments are made under a plan. Under IRS rules, employer health plan contributions are excluded from employment taxes if the payments are made under a plan. The plan may cover not only employees but also dependents.

Employer health plan contributions are excluded from employment taxes (social security, Medicare, and FUTA) if the: -collective bargaining agreement requires it. -payments are made under a plan. -benefits are only for dependents. -fund is combined with the employer's salary account.

-federal income tax. Railroad employers are subject to a separate and distinct system of employment taxes from the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA) systems covering most other employers.

Employers are subject to all employment taxes. Of the following taxes, Railroad employers are only subject to which tax? -Medicare tax. -federal unemployment tax. -federal income tax. -social security tax.

-at a specified time when the deferral was made. IRC Section 409A allows distributions specified at the time the deferral was made. Distributions after the end of the plan year, at the end of calendar year, and at the employee's election before termination violate IRC Section 409A and require immediate inclusion of the plan's value in the employee's income.

For a nonqualified deferred compensation plan to exclude deferrals from income, distributions can be allowed: -at the employee's election before termination of employment. -at the end of the calendar year. -at a specified time when the deferral was made. -at the end of the plan year.

-when there is a change in control of the corporation. IRC Section 409A allows distributions when there is a change in control of the corporation. Distributions when the employee receives a golden parachute payment, when the employee reaches age 65, and when the employee reaches normal retirement age require immediate inclusion of the plan's value in the employee's income.

For a nonqualified deferred compensation plan to exclude deferrals from income, distributions can be allowed: -when there is a change in control of the corporation. -when the employee receives a golden parachute payment. -when the employee reaches normal retirement age. -when the employee reaches age 65.

-employee marital status. An employee's marital status from Form W-4 is not included on any reports from the payroll system.

For compliance purposes, requirements of the payroll system should include the production of all of the following reports EXCEPT: -federal tax withholding. -state tax withholding. -total compensation paid. -employee marital status.

c. March 15. Forms 1042-S are filed with the IRS and furnished to the recipient no later than March 15 of the year following the year the payments were made that are reported on Form 1042-S.

Form 1042-S must be provided to the recipient by: a. January 31. b. February 28. c. March 15. d. March 31.

c. annual employer's tax return for agricultural employers. Form 943 is used by agricultural employers to annually report wages and taxes. Form 944 can be used by employers with an annual tax liability of $1,000 or less. Form 941 is the quarterly employer's tax return. Form 945 is reports nonpayroll federal taxes.

Form 943 is the: a. quarterly employer's tax return. b. annual employer's tax return. c. annual employer's tax return for agricultural employers. d. annual tax return for nonpayroll federal taxes.

- At least once a year no later than December 31 Under IRS rules, employers must recognize the value of taxable noncash fringe benefits as income at least once a year, no later than December 31 to ensure the taxable value and taxes withheld are reported correctly on Form W-2.

How frequently must an employer recognize the value of noncash fringe benefits as income? -Along with its regular tax deposit -At least quarterly -At least once a year, no later than December 31 -With every payroll

-COBRA. Cafeteria plans and other flexible benefit plans are generally funded by either of the following mechanisms: flex dollars or flex credits, salary reduction, or after tax contributions.

IRC §125 Cafeteria plans are generally funded by all of the following mechanisms EXCEPT: -COBRA. -flex dollars. -after-tax employee contributions. -salary reduction.

-must withhold federal income, social security, and Medicare taxes on the tips. If an employee receives and reports $20.00 or more in tips in a calendar month, employer must withhold federal income, social security and Medicare taxes on the tips. A tipped employee's regular wages will be subject to tax withholding before the tips are subject to withholding taxes. Employer may pay tipped employees, who regularly receive at least $30 in tips a month, $2.13 per hour as long as the amount of the tips is enough to raise the employee's regular rate of pay to the minimum wage for the workweek. Employers may use Form 4070, Employee's Report of Tips to Employers, as a way for employees to report tips received to the employer. Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, is used by large food and beverage establishments when the employer is required to make annual reports to the IRS on receipts from food and beverage establishments and tips reported by employees.

If an employee receives and reports $20.00 or more in tips in a calendar month, employers: -must provide the employee with Form 4070. -must withhold federal income, social security, and Medicare taxes on the tips. -may use the tip credit and pay a lower cash wage assuming the tips received are enough to bring the employee's regular rate of pay to minimum wage. -are required to report those tips to the IRS on Form 8027.

c. November 30th of the year the business closed If an employer sells or transfers its business, Form 941 must be filed by both the previous and current owners for the quarter during which the sale took place. Each employer must report only the wages it paid and taxes it withheld. This also expedites the due date of Forms W-2 to SSA to the later of the second month following the quarter the business closed or November 30 of the year in which the final Form 941 is filed.

If an employer goes out of business on May 27th, completion of Part 3 of Form 941 is required with the final date wages were paid. This action also expedites the date the Forms W-2 are due to SSA to: a. the end of the first month following the quarter the business closed. b. the end of the second month following the quarter the business closed. c. November 30th of the year the business closed. d. the normal due date of Forms W-2 for the year the business closed.

c. November 30th of the year the business closed. If an employer sells or transfers its business, Form 941 must be filed by both the previous and current owners for the quarter during which the sale took place. Each employer must report only the wages it paid and taxes it withheld. This also expedites the due date of Forms W-2 to SSA to the later of the second month following the quarter the business closed or November 30 of the year in which the final Form 941 is filed.

If an employer goes out of business on May 27th, completion of Part 3 of Form 941 is required with the final date wages were paid. This action also expedites the date the Forms W-2 are due to SSA to: a. the end of the first month following the quarter the business closed. b. the end of the second month following the quarter the business closed. c. November 30th of the year the business closed. d. the normal due date of Forms W-2 for the year the business closed.

c) 75%. The IRS may assess an accuracy-related penalty for any underpayment of tax due to negligence or disregard of the rules. If the understatement of any underpayment of income or employment tax was due to fraud, a penalty of 75% of the underpayment may be assessed.

In addition to the accuracy-related penalty for underpayment of taxes, if the underpayment of taxes is due to fraud, the IRS may asses an additional penalty of: a) 20%. b) 40%. c) 75%. d) 100%

-W-4S Under IRS rules, an employee must submit Form W-4S, Request for Federal Income Tax Withholding From Sick Pay, to the third-party insurance company to have federal income tax withheld from third-party sick pay.

In order for an employee on disability to have federal income tax withheld from third-party disability payments, he must submit to the insurance company Form: -W-9. -W-8. -W-4P. -W-4S.

-8922 Form 8922, Third-Party Sick Pay Recap, is filed with the IRS to reconcile Forms W-2 with Forms 941 when third-party sick pay is paid. Either the employer, insurer, or employer's agent can file Form 8922.

In order to reconcile Forms W-2 with Forms 941 when third-party sick pay is paid, what form must be filed with the IRS? -8922 -W-2 -941 -8809

-When an employer receives an IRS lock-in letter indicating to do so When the IRS issues a lock-in letter, the employer is required to comply with the direction to change an employee's withholding amount as indicated on the letter.

In which situation is an employer required to revise an employee's Form W-4 withholding information? -When the employer suspects the form as completed is not correct -When the employer has received a tax levy on the employee -At the beginning of the calendar year -When an employer receives an IRS lock-in letter indicating to do so

-de minimis fringes. The IRC defines nontaxable de minimis fringe benefits as small value items, provided occasionally to the employee. Occasional use of the company's copy machine and internet connection are de minimis fringe benefits.

Last month, an employee typed a personal letter and photocopied 50 fliers for a club's garage sale using company equipment. The employee also purchased gifts using the company's Internet connection. The IRC defines these services as: -taxable compensation. -de minimis fringes. -working condition fringes. -no-additional-cost services.

d. 1099-R. Payments from a qualified pension plan are reported on Form 1099-R. Form W-2 is used to report an employee's wages and taxes. Form 1099-MISC is used to report payments to independent contractors except for nonemployee compensation which is reported on Form 1099-NEC.

Payments from a qualified pension plan are reported on Form: a. W-2. b. 1099-MISC. c. 1099-NEC d. 1099-R.

-1099-NEC. Payments to a statutory nonemployee are reported on Form 1099-NEC.

Payments to a statutory nonemployee are reported on Form: -941. -945. -1099-NEC. -W-2.

c. DD. The cost of employer-provided health coverage is reported on Form W-2, Box 12, Code DD.

Reporting the cost of employer-provided health coverage is fulfilled by completing Form W-2, Box 12 with Code: a. J. b. W. c. DD. d. GG.

-allocate the aggregate information reported on Form 941 by an agent to each client. Schedule R (Form 941) is used to allocate the aggregate information reported on Form 941 by an agent to each client. Schedule D is used to report discrepancies caused by acquisitions, statutory mergers, or consolidations. Schedule B (Form 941) records an employer's payroll tax liability by day, not the deposits.

Schedule R (Form 941) is used to: -report daily tax deposits reported on Form 941 by semiweekly depositors. -allocate the aggregate information reported on Form 941 by an agent to each client. -report daily tax liabilities on Form 941 for semiweekly depositors. -allocate discrepancies caused by acquisitions, statutory mergers, or consolidations.

-in which the employee performs services. As a starting point, the default rule of state income tax withholding is to withhold income tax for the state in which services are performed. This can be applied in most situations in which the employee lives and works in the same state (assuming the state has income tax withholding).

The default rule of state income tax withholding is to withhold income tax for the state: -where the employee has a base of operations. -in which the employee lives. -in which the employee performs services. -where the employee receives direction and control.

-direct deposit From an employer's perspective direct deposit is the easiest and most convenient method of paying employees. Paying employees with cash, check, or through a payroll card is more expensive for the employer than direct deposit.

The easiest and MOST convenient method of pay for employers is: -a payroll card. - paper check. -direct deposit. -a cash payment.

The correct answer is: 16%. The base housing amount is 16% of the maximum foreign earned income exclusion, figured on a daily basis, multiplied by the number of days during the year the employee met the bona fide residence or physical presence test. The 2021 foreign earned income exclusion of $108,700.00 produces a base housing amount of $17,392.00.

The foreign base housing amount is what percentage of the foreign earned income exclusion?

c. 911 IRC Section 911 defines the limitations and eligibility requirements for the foreign earned income or housing cost exclusions.

The foreign earned income exclusion is allowed under IRC Section: a. 401. b. 411. c. 911. d. 941.

d. nonqualified plan. Under IRS rules, maximum pretax deferral for retirement plans such as 401(k), 403(b), and 457(b) plans, is indexed annually for inflation. There are no limits in the IRC for contributions to nonqualified plans.

The maximum pretax deferral an employee can make is indexed annually for inflation for all of the following retirement plans EXCEPT a: a. 401(k) plan. b. 403(b) plan. c. 457(b) plan. d. nonqualified plan.

-receiving shipments at the shipping dock. The primary duties of an exempt administrative employee must consist of performing non-manual or office work directly related to the management or general business operations of the employer or the employer's customers, or performing work directly related to academic instruction or training carried on in the administration of a school system or educational institution.

The primary duties of an exempt administrative employee may include all of the following EXCEPT: -office work related to general business operations. -office work related to management policies. -administration of a school system. -receiving shipments at the shipping dock.

-physical facilities, organization, and appearance of the payroll staff. Tangibles, one of the five principles of customer service, identifies the physical facilities, organization, and appearance of the payroll organization.

The tangibles that a payroll department displays are the: -ongoing communications with other employees. -physical facilities, organization, and appearance of the payroll staff. -account reconciliations prepared each quarter. -monies collected for child support administration fees.

-be covered under a high-deductible health plan. Under IRS Health Savings Account rules, the individual participating in a HSA must be enrolled in high deductible health insurance plans. A HSA can be part of a Section 125 Cafeteria Plan but is not required to be part of a Section 125 Cafeteria Plan. HSAs do not have limitations on the age of the participants or the size of the employer providing the HSA.

To be eligible for a Health Savings Account, the employee must: -have dependents under age 16. -be covered under a high-deductible health plan. -be enrolled in a Sec. 125 plan. -work for an employer with 50 or fewer employees.

-Social security and Medicare To alleviate the burden of double social security and Medicare taxation, the U.S. has entered into totalization agreements with 26 countries.

Totalization agreements alleviate the burden of double taxation for which of the following taxes? -Federal unemployment tax -State unemployment tax -Federal income tax -Social security and Medicare

-federal income tax, social security, and Medicare taxes, unless specific exclusions exist. U.S. citizens and resident aliens working for U.S. companies outside the U.S. are generally subject to federal income tax, social security and Medicare taxes, unless specific exclusions exist. Exclusions for U.S. citizens working abroad include the foreign earned income and foreign housing cost exclusions.

U.S. citizens working for U.S. companies abroad are generally subject to: -Medicare taxes only. -federal income taxes only. -social security and Medicare taxes only. -federal income tax, social security, and Medicare taxes, unless specific exclusions exist.

d. annually. Under IRS regulations, an employer MUST include non-cash fringe benefits in an employee's income at least annually to ensure the taxable fringe benefit is reported correctly on Forms W-2 and 941.

Under IRS regulations, an employer MUST include non-cash fringe benefits in an employee's income at least: a. each pay period. b. quarterly. c. semiannually. d. annually.

The plan administrator has 40 business days from the date of the receipt of the National Medical Support Notice to tell the state agency whether coverage is available for the child and, if so, whether the child is already covered under the plan or what the custodial parent has to do to initiate coverage.

Under National Medical Support Notice rules, a plan administrator must tell the state child support agency whether coverage is available for a child within: a) 7 business days. b) 14 business days. c) 21 business days. d) 40 business days.

-having an advanced type of knowledge in a field of science. An exempt executive employee must manage a customarily recognized department, direct the work of two or more full-time employees, and be paid the a weekly salary of at least $684.00.

Under the FLSA white collar exemption rules, an exempt executive employee must meet all of the following requirements EXCEPT: -having an advanced type of knowledge in a field of science. -managing a customarily recognized department. -being paid a weekly salary of at least $684.00. -directing the work of two or more full-time employees.

-having authority to hire and fire employees. Exempt professional employee's duties require to having knowledge acquired through prolonged study, consistently exercise discretion and judgment, and be paid a weekly salary of at least $684.00.

Under the FLSA white collar exemption rules, an exempt professional employee must meet all of the following requirements EXCEPT: -having knowledge acquired through prolonged study. -having authority to hire and fire employees. -consistently exercising discretion and judgment. -being paid a weekly salary of at least $684.00.

-begins performing principal activities. Under the FLSA, an employee's work time commences when the employee begins performing principal activities.

Under the FLSA, an employee's work time commences when the employee: -leaves home for work. -arrives at the job site. -punches in on the time clock. -begins performing principal activities.

-time the employee is performing principal activities. Under the FLSA, an employee's workday is defined as the time the employee is performing principal activities.

Under the FLSA, an employee's workday is defined as the: -entire time the employee spends on the job site. -employee's scheduled shift. -time recorded on the employee's time sheet. -time the employee is performing principal activities.

-managing an enterprise, department, or subdivision. Under the FLSA, an exempt executive's primary duty must include managing an enterprise, department, or subdivision, direct the work of at least two or more full-time equivalent employees, and have the authority to hire and fire other employees.

Under the FLSA, an exempt executive's primary duty must include: -working under direction. -working no more than 20% of the employee's time in nonexempt duties. -managing an enterprise, department, or subdivision. -supervising two part-time employees.

-within one month after the end of the year, make a final payment to the employee to reach $107,432.00 in annual compensation Under the FLSA, when a highly compensated exempt employee receives less than $107,432.00 in compensation during the year, the employer may within one month after the end of the year, make a final payment to the employee to reach $107,432.00 in annual compensation.

Under the FLSA, when a highly compensated exempt employee receives less than $107,432.00 in compensation during the year, the employer may: -not make a payment after the end of the year allowing the employee's compensation to reach $107,432.00. -automatically change the employee's classification to an administrative exempt employee. -make a payment by April 1 after the end of the year allowing the employee's compensation to reach $107,432.00. -within one month after the end of the year, make a final payment to the employee to reach $107,432.00 in annual compensation

Under the FLSA, an employer may establish more than one workweek for its business requirements. It may have one workweek for clerical employees and another for assembly workers

Under the FLSA, which of the following statements is true? -Employers must pay overtime for hours worked on federal holidays. -An employer's workweek must coincide with the calendar week. -Employers must pay overtime when employees work more than eight hours in a workday. -An employer may establish one workweek for clerical employees and another for assembly workers.

b. 25% The concentration test for cafeteria plans determines if the nontaxable benefits given to key employees do not exceed 25% of such benefits given to all employees participating in the plan.

Under the concentration test, a cafeteria plan is not discriminatory if benefits provided to key employees do not exceed: a. 10%. b. 25%. c. 50%. d. 75%.

-When paper Forms 1042-S are filed with the IRS Form 1042-T is the transmittal for paper Forms 1042-S filed with the IRS. Organizations can file less than 250 Forms 1042-S on paper with the IRS without penalty.

Under what condition is a Form 1042-T filed? -When Forms 1042-S are filed electronically with the IRS -When paper Forms 1042-S are filed with the IRS -When Forms 1042-S are filed electronically with the SSA -When paper Forms 1042 are filed with the SSA

-When Forms 1042-S are filed electronically with the SSA Form 1042-T is the transmittal for paper Forms 1042-S filed with the IRS. Organizations can file less than 250 Forms 1042-S on paper with the IRS without penalty.

Under what condition is a Form 1042-T filed? -When paper Forms 1042-S are filed with the IRS -When Forms 1042-S are filed electronically with the SSA -When paper Forms 1042 are filed with the SSA -When Forms 1042-S are filed electronically with the IRS

-wages. Unearned income includes interest earned on a savings account, dividends, capital gains, or other investment income.

Unearned income includes all the following items EXCEPT: -dividends. -interest. -wages. -capital gains.

The correct answer is: $1,055.64. To calculate net pay, determine the employee's gross pay (regular pay plus overtime pay) then subtract the deductions withheld from the employee's pay.

Using the information below, calculate the employee's net pay. **Regular pay $1,312.50 **Overtime pay $25.50 **Federal income tax $135.00 **State income tax $45.00 **Social security tax $82.96 **Medicare tax $19.40

The correct answer is: $713.15. To calculate net pay, subtract all the deductions withheld from the employee's gross pay (regular pay plus overtime pay).

Using the information below, calculate the employee's net pay. **Regular pay$845.50 **Overtime pay $67.50 **Federal income tax $95.00 **State income tax $35.00 **Social security tax $56.61 **Medicare tax $13.24

The correct answer is: $82.00 When calculating federal income tax from supplemental wages when the employee's year-to-date supplemental wages are $1,000,000.00 or less, using the Aggregate Method, add the supplemental wages to the employee's regular wages, and calculate the FITW with the Wage-Bracket table using the employee's filing status and information provided on Form W-4. On a pre-2020 Form W-4, use Worksheet 3 from Publication 15-T.

Using the the *Aggregate Method* and the *Wage Bracket Method* calculate an ee fed tax when ee earns $620.00 each biwkly pay period and had received a $1K bonus paid with the current biwkly pay. The ee claims married with 2 allowances on a 2018 Form W-4:

- a refund to the employee Voiding a check that was not constructively received in a subsequent year requires correcting wages and taxes reported using Forms W-2c, 941-X, and the appropriate state forms. Since the employee never received the monies, no refund is due.

Voiding a check issued in error after all returns were filled will require all the following EXCEPT: -a refund by the IRS. -submission of Form W-2c. -a refund by other taxing agencies. -a refund to the employee

-Make the deduction as required. Under the CCPA, an employer must withhold the lesser of the amount on the Income Withholding Order or the allowed percentage of the employee's disposable earnings, based on the employee's family status and arrearages found on the order, to satisfy the child support order or be subject to penalties for failing to withhold the child support.

What action must an employer take when receiving a child support order? -Make the deduction as required. -Discipline the employee because of the deduction. -Terminate the employee because of the deduction. -Tell the employee to resolve the issue with the state disbursement unit.

-The employee attests to the accuracy of the data The perjury statement on Form W-4 indicates the employee attests to the accuracy of the data on the form.

What does the perjury statement on Form W-4 indicate? -The employee agrees with all the statements on the form -The employee disputes the data entered on the form -The employee attests to the accuracy of the data -The employer has verified the data on the form

a. Hours worked only Under the FLSA, nonexempt employees being paid under the fluctuating workweek are required to a have their hours worked fluctuate with the employee working more than 40 hours in some weeks and under 40 hours in other weeks. Even though a nonexempt employee's hours fluctuate, the employee is paid a fixed salary for the hours worked.

What fluctuates for employees paid on a fluctuating workweek? a. Hours worked only b. Salary paid each week only c. The workweek d. Both hours and salary

c. $26,000.00 Under IRS rules, a 401(k) plan may allow an employee age 50 or older to make an additional $6,500.00 contribution beyond the $19,500.00 deferral limit.

What is the maximum amount an employee, age 55, can defer into a 401(k) plan? a. $18,500.00 b. $19,500.00 c. $26,000.00 d. $27,000.00

-Accounting An employee's repayment of overpaid wages impacts payroll records, accounting records, and tax reporting. Human resources, benefits, and timekeeping records generally are not impacted by an overpayment.

What type of records are impacted by the repayment of overpaid wages? -Accounting -Timekeeping -Human resources -Benefits

-All wages and benefits unless the Internal Code provides an exception All wages and benefits received by an employee are subject to federal taxes and reporting, unless the Internal Revenue Code (IRC) provides an exception. The IRC broadly defines wages as "all remuneration for employment, including the cash value of all remuneration (payment for services, including benefits) paid in any medium other than cash."

What wages and benefits received by an employee are subject to federal taxes and reporting? -Only the wages and benefits listed as taxable in IRS publications -Only the cash wages paid to the employee are taxable -All wages and benefits are taxable in all circumstances -All wages and benefits unless the Internal Code provides an exception

-A journal entry to record the repayment and reverse the overstated wage expense The journal entry recording the repayment of overpaid wages reverses the journal entry recording of the payment of wages. This will reduce the overstated wage expense account.

What will be required in the accounting records when a repayment of overpaid wages occurs? -A general ledger adjustment to reverse the repayment and the record overstated wage expense -A general ledger adjustment to record the repayment and reverse the overstated wage expense -A journal entry to record the repayment and reverse the overstated wage expense -A journal entry to reverse the repayment and the record overstated wage expense

-No federal income tax is withheld When an employee receiving payments from a third-party sick pay provider fails to complete a Form W-4S, Request for Federal Income Tax Withholding From Sick Pay, no federal income tax is withheld from the payments.

When an employee receiving payments from a third-party sick pay provider fails to complete a Form W-4S, how much, if any, federal income tax is withheld from the payments? -A flat 25% per payment -A flat $20.00 per payment -No federal income tax is withheld -Withholding is based on marital status of single and no adjustments

Under IRS rules, when stock provided to an employee contains restrictions, the fair-market value of the stock is included in the employee's income when the risk of forfeiture ends.

When an employer compensates an employee with restricted stock, when is the compensation taxable? -At the end of the year -When the employee sells the stock -When the risk of forfeiture ends -At the end of the next quarter

b. 941-X. Corrections to Form 941 are made using Form 941-X. Form 843 is used to request a refund of an assessment. Form 943 is used by agricultural employers. Form 944 can be used by employers with an annual tax liability of $1,000 or less.

When correcting Form 941, Line 2, Wages, tips, and other compensation, file Form: a. 843. b. 941-X. c. 943. d. 944.

-segregates job duties. Internal controls are designed to safeguard a company's assets and ensure that the financial statements are not materially misstated. Internal controls include edits, balancing and reconciling, documentation, data auditing and validity, security, segregation of job duties, check processing, and rotation of personal.

When implementing internal controls in the payroll department, the payroll manager: -allows unlimited access to the system. -assigns payroll staff to reconcile the payroll bank account. -segregates job duties. -assigns job duties permanently.

-With the company's regular tax deposit The employer's tax liability, whether from a regular payroll or a bonus payroll, is deposited using the semiweekly or monthly rules based on the lookback period's liability.

When must taxes be deposited that are withheld from employee bonuses paid with the regular payroll? -With the company's regular tax deposit -By the end of the month -With the employer's annual tax return -With the employer's quarterly tax return

-actual COBRA premium charged method. An employer is not required to use the same method for every plan but must use the same method with respect to a plan for every employee receiving coverage under that plan. The following methods are allowed to be used to calculate the cost of coverage: Premium charged method, COBRA applicable premium method (but does not include the 2% administrative fee), or Modified COBRA premium method.

When reporting the cost of employer-provided health coverage on Form W-2, all the following methods can be used for calculating the amount EXCEPT: -COBRA applicable premium method. -premium charged method. -modified COBRA premium method. -actual COBRA premium charged method.

The correct answer is: 70.35% When an employer agrees to pay the taxes on an employee's payment, the calculation of taxable wages requires using the gross-up formula. When grossing-up an employee's net wages, divide the desired net pay by 100% less all of the employee's tax rates.

When using the Optional Flat Rate Method, by what percentage is a bonus divided when grossing up for employees with YTD wages less than $142,800.00 with no state or local withholding taxes?

-Cost of employee benefit programs - Expense The cost of employee benefit programs and the company's portion of the social security tax are expenses of the company. 401(k) contributions withheld but not paid are liabilities of the company.

Which account is identified correctly? -Cost of employee benefit programs - Expense -Employer's social security tax - Asset -Company portion of social security tax - Asset -401(k) plan contributions which have been withheld from employees - Expense

-180-day notes payable On the balance sheet, liabilities are listed in the order in which they must be paid with a note payable in 180 days would be the first listed.

Which account is listed as a current liability on the balance sheet? -180-day notes payable -Mortgage on plant -Two-year note -20-year corporate bonds issued

a. Form 941 Form 941 is used by all employers even governmental employers only withholding Medicare tax.

Which form is used by a local government employer when withholding only Medicare tax? a. Form 941 b. Form 943 c. Form 944 d. Form 945

-403(b) plan Only a 403(b) plan offers tax-sheltered annuities. Public schools and tax-exempt charitable, religious, and educational organizations may purchase "tax-sheltered" annuities.

Which of the following deferred compensation plans offers tax-sheltered annuities? -403(b) plan -401(k) plan -125 plan -457(b) plan

-Company-provided group-term life insurance in excess of $50,000.00 Group-term life insurance in excess of $50,000 is taxable. IRC Sec. 132 defines working condition fringe benefits, such as company holiday party, dues for professional organizations, and qualified retirement advice for 401(k) plans as nontaxable fringe benefits.

Which of the following employer-provided benefits is taxable? -Company holiday party -Company-provided group-term life insurance in excess of $50,000.00 -Retirement advice for a 401(k) plan -Employer reimbursement for professional organization fees

-Discriminatory benefits provided in a self-insured plan to highly compensated employees The IRS rules require income be imputed for highly compensated employee who receive discriminatory benefits in a self-insured plan. Reimbursements of qualified medical expenses and Sec. 125 reimbursements are not taxable.

Which of the following health insurance arrangements are taxable? -Employer reimbursements of qualified medical expenses -Discriminatory benefits provided in a self-insured plan to highly compensated employees -Sec.125 plan reimbursements -Self-insured coverage for nonhighly compensated employees

-Inventory Assets are items of value to the company and may be current, property or intangible and include the inventory available to sell to customers. Liabilities are debts of the company or claims against the company and may be current or long-term. They include garnishments withheld and unpaid salaries. Expenses are the costs incurred to produce the company's products or services and include the cost of the employer's benefit program.

Which of the following items is an asset? -Company cost of employee benefit programs -Unpaid salaries of employees -Garnishment withheld but not yet paid -Inventory

-Filing status The IRS requires employers to have the following information in order to calculate federal income tax: the employee's taxable wages, filing status, adjustments, and pay frequency. These are used to calculate FITW from regular wages. When calculating FITW from supplemental wages, the employer needs to have the employee's taxable wages and the year-to-date taxable wages

Which of the following items of information is required to correctly calculate federal income tax withholding? -Take-home pay -Filing status -Tax levies in effect -After-tax deductions

-$10,000.00 mortgage payment, posted to the liability account In a journal entry, debits decrease liabilities (such as payments made on a mortgage). In a journal entry, credits increase liabilities (such as withheld taxes) and decrease assets in the payroll checking account.

Which of the following journal entries is posted as a debit? -$15,000.00 withheld taxes, posted to the liability account -$45,000.00 payroll checks issued to employees, posted to the payroll checking account -$10,000.00 mortgage payment, posted to the liability account -$5,000.00 paycheck, posted to the cash account

-$15,000.00 deposit of withheld taxes, posted to liability account. In a journal entry, debits decrease liabilities when taxes withheld are deposited. In a journal entry, credits increase liabilities (such as taxes withheld but not deposited), decrease assets (such as the payroll checking account when the employees are paid) and decrease expense accounts when an employee repays an overpayment

Which of the following journal entries is posted as a debit? -$500.00 overpayment repaid by employee, posted to expense account -$15,000.00 deposit of withheld taxes, posted to liability account -$5,000.00 paycheck, posted to the checking account -$5,000.00 state income tax withheld, posted to the liability account

-Escheat laws Escheat of unclaimed wages is governed by state agencies only. Overtime, garnishments, and tax levies are regulated by both federal and state laws.

Which of the following payroll issues are governed only by the states? -Overtime -Garnishments -Escheat laws -Levies

-Urgent and important Urgent and important task, such as year-end processing or resolving a current processing issue, are tasks of highest priority.

Which of the following situations should be the highest priority to address? -Urgent and important -Not urgent and not important -Not urgent but important -Urgent but unimportant

-Contributions to a Roth 401(k) plan are subject to social security and Medicare taxes when deferred. Under IRS rules, employee contributions to a Roth 401(k) plan are subject to income tax at the time of contribution and are subject to social security (6.2%) and Medicare (1.45%) taxes. The IRC limits an employee's deferral to a 401(k) plan to the lesser of the plans limit or $19,500.00. If the employee's age at the end of the year is 50 or older, the employee can defer an additional $6,500.00. 403(b) plans are designed for employees of tax-exempt organizations, 457(b) plans are designed for employees of state and local government employees, and employers are not required to match employee contributions to a 401(k) plan.

Which of the following statements is true about 401(k) plans? -A 401(k) plan is designed primarily for employees of tax-exempt organizations. -Contributions to a Roth 401(k) plan are subject to social security and Medicare taxes when deferred. -A 401(k) plan is a deferred compensation plan primarily for employees of state and local governments. -A 401(k) plan must allow eligible employees to contribute up to 15% of their wages.

-The benefit menu may include both cash and qualified nontaxable benefits. Cafeteria plans provide an employee the ability to choose between taxable and nontaxable benefits such as cash.

Which of the following statements is true about Sec. 125 plans? -At the end of the plan year, employees receive cash payments for amounts remaining. -Employees working 30 hours a week or more must be included in the company's Sec. 125 plan. -Benefits in the plan include group-term life insurance, medical/dental coverage, employee discounts, and scholarship grants. -The benefit menu may include both cash and qualified nontaxable benefits.

-Employer contributions taken as cash are taxable compensation. Cafeteria plans must provide the employee the ability to choose between taxable and nontaxable benefits. When a taxable benefit such as cash is chosen, the amount received is included in the employee's income. IRC Section 125 allows cafeteria plans the ability to provide nontaxable benefits such as medical coverage, additional vacation days, and contributions to 401(k) plans. In most cases, benefits excluded from income under other IRC provisions, such as employee discounts, cannot be provided in a Section 125 Cafeteria Plan. IRS eligibility rules for Section 125 Cafeteria Plans do limit the participation based on the number of hours an employee works.

Which of the following statements is true about Sec. 125 plans? -Benefits in the plan include group-term life insurance, medical/dental coverage, employee discounts, and scholarship grants. -Employer contributions taken as cash are taxable compensation. -Any benefits received in cash are not taxed. -Employees working 10 hours a week or more must be included in the company's Sec. 125 plan.

-401(k) plans can be funded through salary deferral plans. Under IRS rules, a 401(k) plan may allow an employee age 50 or older to make an additional $6,500.00 contribution beyond the $19,500.00 deferral limit. 457(b) plans, not 401(k) plans, are designed for employees of state and local governments. Employers are not required to match an employee's 401(k) contribution.

Which of the following statements is true regarding 401(k) plans? -Employers must match employee deferrals to 401(k) plans. -401(k) plans can be funded through salary deferral plans. -401(k) plans must allow eligible employees to defer up to 15% of their wages. -401(k) plans are deferred compensation plans for employees of state and local governments only.

-The benefit options must include both cash and qualified nontaxable benefits. IRS rules require Section 125 plan benefits received to include both cash and eligible benefits. When cash is received from a Cafeteria Plan, it is included in the employee's income. Cafeteria plan rules require the loss of contributions at the end of the plan year when the employee has not incurred eligible expenses.

Which of the following statements is true regarding Sec. 125 plans? -Any benefits received in cash are not taxable. -The benefit options must include both cash and qualified nontaxable benefits. -At the end of the plan year, employees receive cash payments for remaining unreimbursed amounts. -Benefits in the plan must include group-term life insurance, medical/dental coverage, employee discounts, and scholarship grants.

-For employees supporting another family and not in arrears, child support deductions cannot exceed 50% of disposable pay. Under the CCPA, an employer must withhold the lesser of the amount on the order or the allowed percentage of the employee's disposable earnings to satisfy the child support order. States may require a lower percentage than the CCPA requires but not a greater percentage. The general priority for involuntary deductions is as follows: child support orders, bankruptcy orders, federal tax levies, federal administrative garnishments, student loan garnishments, state tax levies, local tax levies, and creditor garnishments. All divorce decrees require child support withholding unless both parties and the court agree to other procedures.

Which of the following statements is true regarding involuntary wage attachments under federal law? -The priority on wage attachments is (1) student loan garnishment, (2) child support and (3) federal tax levy. -A non-custodial parent must be in arrears before withholding can be ordered for child support. -For employees supporting another family and not in arrears, child support deductions cannot exceed 50% of disposable pay. -State law can require a higher percentage of disposable pay for child support deduction than the federal law.

-An engineer employing assistants to complete a project A company does not have the right to control an independent contractor's work.

Which of the following workers is an independent contractor? -A day-care worker guaranteed a minimum salary plus a percentage of the profits -A lawyer working as a paralegal -An engineer employing assistants to complete a project -A free-lance copywriter required to work on-site and comply with the company's policies

-The manager of a payroll department supervising two full-time employees An exempt employee must meet the FLSA duties and salary requirements.

Which of the following workers is classified as an exempt employee? -A purchasing assistant performing clerical functions -An assistant office manager with no subordinates earning $1,174.00 per week -The manager of a payroll department supervising two full-time employees -A trainee soliciting orders for the company's products

-An executive assistant earning $1,029.00 each week exercising discretion while performing duties An exempt employee must meet the FLSA duties and salary requirements.

Which of the following workers is classified as an exempt employee? -An assistant office manager with no subordinates earning $700.00 per week -An executive assistant earning $1,029.00 each week exercising discretion while performing duties -A part-time dock worker operating fork lifts -A laboratory assistant responsible for duties which are reviewed by the supervisor

-Employers Employers determine which EFTPS method and procedure used to make tax deposits.

Who develops procedures for initiating tax deposits? -SSA -Employers -The company's financial institution -IRS