Question 1

Schedule B must accompany Form 941 for a firm classified as a semi-weekly payroll tax depositor.

Accepted Answer

Schedule B is required to be filed along with Form 941 for firms that are classified as semi-weekly payroll tax depositors. Schedule B provides details about the tax liability and deposits made by the firm during the quarter.

Question 2

Form W-3 is the report of wages issued to independent contractors and is due to the IRS by January 31 of the following year.

Accepted Answer

Form W-3 is not used to report wages issued to independent contractors. It is used to transmit copies of Form W-2, Wage and Tax Statement, to the Social Security Administration. The due date for Form W-3 is also different and varies depending on whether the forms are being filed electronically or on paper.

Question 3

Employers who inadvertently fail to file quarterly or annual reports may be subject to monetary penalties.

Accepted Answer

Employers who fail to file quarterly or annual reports may be subject to monetary penalties.

Question 4

Dena's Decorations is a South Carolina business that has a SUTA rate of 3.6% and an annual SUTA wage base of $14,000. The employee earnings for the past calendar year are: B. Gilfilan $22,180, P. Laubach $37,690, S. Loftin $15,320, M. Moravec $9,840. What are the FUTA and SUTA tax liabilities for Dena's Decorations?

Accepted Answer

The answer of Dena's Decorations is a South Carolina business...

Question 5

On a recent paycheck, Mayim's taxes were as follows: Federal withholding, $32; Social Security tax, $35.94; Medicare, $8.90; and state income tax, $10.50. What is the employer's share for these taxes?

Accepted Answer

To find the employer's share, we need to add up all of the taxes and subtract Mayim's portion.

Employer's share = (Federal withholding + Social Security tax + Medicare + state income tax) - (Mayim's Federal withholding + Mayim's Social Security tax + Mayim's Medicare + Mayim's state income tax)

Employer's share = ($32 + $35.94 + $8.90 + $10.50) - ($32 + $35.94 + $8.90 + $10.50)

Employer's share = $55.34 - $0

Employer's share = $55.34

Therefore, the answer is C) $44.84.

Question 6

Mandatory employer-paid payroll taxes are known as statutory deductions.

Accepted Answer

Statutory deductions are referred to mandatory employer-paid payroll taxes that employers are required by law to withhold and remit to the government on behalf of their employees. Examples of statutory deductions include Social Security tax, Medicare tax, and Federal Unemployment Tax.

Question 7

Johnny's Tavern had 16 employees and total annual wages of $376,948 during the previous year. All employees earned more than $7,000 during the year. What is Johnny's Tavern's FUTA tax liability?

Accepted Answer

The answer of Johnny's Tavern had 16 employees and total...

Question 8

A firm's frequency of tax deposits is determined by payroll tax liability during the lookback period.

Accepted Answer

The lookback period is the previous year, and a firm's frequency of tax deposits for payroll taxes is determined based on their liability during that period.

Question 9

PCD Inc. operates as a Nevada business. The SUTA wage base for Nevada is $28,200. PCD Inc.'s SUTA tax rate is 4.5%. The employees' annual earnings for the past calendar year are as follows: Annabelle $36,750, Beatrice $24,880, Michael $42,200, Howard $26,500. What is PCD Inc.'s SUTA tax liability for the year?

Accepted Answer

The answer of PCD Inc. operates as a Nevada business....

Question 10

Form 940 is the report of tax liability for monthly schedule depositors.

Accepted Answer

Form 940 is actually the Employer's Annual Federal Unemployment (FUTA) Tax Return, not a report for monthly schedule depositors.

Question 11

Jeremiah is a full-time exempt employee who earns an annual salary of $215,000. What is the employer's annual FICA tax responsibility for Jeremiah's salary, based on an annual Social Security tax wage base of $127,200?

Accepted Answer

The employer's annual FICA tax responsibility for Jeremiah's salary is $11,003.90. This is calculated as follows:Social Security tax: 6.2% x $127,200 = $7,898.40Medicare tax: 1.45% x $127,200 = $1,845.50Total FICA tax: $7,898.40 + $1,845.50 = $11,003.90

Question 12

Timechex operates as a Nevada business. The employees' annual earnings for the past calendar year are as follows: Will, $28,440: Adalia, $35,786: Brian, $18,490; and Amanda, $6,500. What is Timechex's FUTA tax liability for the year?

Accepted Answer

To calculate FUTA tax liability, the first step is to determine the taxable wages. For 2021, the taxable wage base is $7,000 per employee. Therefore, Will, Adalia, and Brian all have taxable wages of $7,000, while Amanda has taxable wages of $6,500 since she earned less than $7,000.

The FUTA tax rate for 2021 is 0.6%. Therefore, the calculation for Timechex's FUTA tax liability for the year would be:

($7,000 x 0.6%) x 3 employees + ($6,500 x 0.6%) x 1 employee = $165.

Therefore, the correct answer is D.

Question 13

What is the term for the employer's mandatory payroll taxes that the government has written into law?

Accepted Answer

Statutory deductions are mandatory payroll taxes that are written into law, such as Social Security, Medicare, and unemployment insurance. Therefore, option C is the correct answer. Option A (mandated taxes) and option D (legal deductions) are not specific to payroll taxes and can refer to other types of taxes or deductions. Option B (legislated deductions) is similar to option C but is less commonly used in this context.

Question 14

Payroll taxes for which the employer is responsible for paying a percent of employee compensation include FICA taxes, federal income tax, and FUTA tax.

Accepted Answer

The answer of Payroll taxes for which the employer is...

Question 15

An employer files Form 941 on either a quarterly basis or when they deposit payroll taxes, whichever is more frequent.

Accepted Answer

The answer of An employer files Form 941 on either...

Question 16

Electronic tax deposits are usually processed through the:

Accepted Answer

Electronic tax deposits are usually processed through the Electronic Federal Tax Payment System (EFTPS), which is a free service provided by the U.S. Department of Treasury to make electronic tax payments. A, B, and C are not commonly used systems for electronic tax deposits.

Question 17

FUTA tax rates vary from state to state.

Accepted Answer

FUTA tax rates are federally determined and are the same across all states. However, states may have their own state unemployment tax (SUTA) rates that vary.

Question 18

Which of the following items is always the employer's sole responsibility?

Accepted Answer

FUTA taxes (Federal Unemployment Tax Act) are solely the responsibility of the employer. SUTA taxes (State Unemployment Tax Act) are split between the employer and employee, federal income tax is the responsibility of the employee, and FICA taxes (Social Security and Medicare) are split between the employer and employee.

Question 19

A firm that had $55,650 in annual payroll tax liability during the lookback period will be a monthly schedule depositor.

Accepted Answer

The answer of A firm that had $55,650 in annual...

Question 20

Concrete Works is a California company with a SUTA tax of 5.2% and a SUTA wage base of $7,000. The employee earnings for the past year are: T. Borek $17,875, G. Hizny $2,250, A. McBean $18,550, C. Triebert $6,950. California, employers pay an Employment Training Tax (ETT) of 0.1% on all wages up to the first $7,000 of wages. What are the employer-share taxes for FUTA, SUTA, ETT(.1%), and FICA for the year? (ignore worker's compensation insurance)

Accepted Answer

FUTA: $17,875 + $2,250 + $18,550 + $6,950 = $45,625 x 0.6% = $273.75SUTA: $17,875 + $2,250 + $18,550 + $6,950 = $45,625 x 5.2% = $2,366.50ETT: $17,875 + $2,250 + $18,550 + $6,950 = $45,625 x 0.1% = $45.63FICA: $17,875 + $2,250 + $18,550 + $6,950 = $45,625 x 7.65% = $3,473.25Total: $273.75 + $2,366.50 + $45.63 + $3,473.25 = $6,159.13

Quiz 6: Employer Payroll Taxes and Labor Planning