Quiz 10: Payroll Taxes
Business
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Income tax is the tax paid by individuals, household and business entities to the government on the earnings that they have. Payroll taxes are those portions of salary which is withheld by employer when paying salaries to employees and then this portion is submitted to government by employer on behalf of the employee.When payment is given to employee by the employer then they include many things in this payment like salaries, incentives, bones, commission, payment against fringe benefits which are taxable, etc. Employer is liable to withhold a portion of compensation for all such payments which are mentioned above.
Q 2Q 2
Use the information from Problem 57. Prepare the Form 941, including Schedule B, for the second quarter of 2010. Assume that the payroll is consistent every pay period beginning in April through June 30 and that all tax deposits were made on a timely basis as required. Jones Company's Employer Identification Number (EIN) is 36-1238975 and its address is 1825 Elkhart Way, Columbus, GA 31904. Assume Jones paid $2,400 in COBRA assistance payments for two individuals for the quarter. There were no new employees hired.
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Q 3Q 3
Who completes Form W-4, and what is its purpose? What information does it provide to employers?
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Income tax is the tax paid by individuals, household and business entities to the government on the earnings that they have. Payroll taxes are those portion of salary which is withheld by employer when paying salaries to employees and then this portion is submitted to government by employer on behalf of the employee.When payment is given to employee by the employer then they include many things in this payment like salaries, incentives, bones, commission, payment against fringe benefits which are taxable, etc. Employer is liable to withhold a portion of compensation for all such payments which are mentioned above.There is a form W-4 which has to be filled and provided by employee to the employer. This form has to be provided by the employee when job starts. This form provides details of the filing status of the employee who is the taxpayer. Employee provides the information about his withholding allowances to the employer which helps employer calculate the correct amount of salary to withhold. When the numbers of withholding allowances are high then the amount of salary withheld by employer will be less.
Q 4Q 4
Use the information from Problem 57. Prepare the Form 940 for 2010. Assume that Jones Company has timely paid all amounts due to the state unemployment fund assume a total amount of $3,471) and that the payroll was consistent throughout the entire year. No FUTA deposits were made during the year.
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Q 5Q 5
If a taxpayer makes $30,000 per year, will the annual withholding differ depending on whether the taxpayer is paid weekly, semimonthly, or monthly? Explain.
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Q 6Q 6
Use the information from Problem 57. Prepare a Form W-2 for Heather Burk. Her SSN is 412-34-5670 and her address is 988 Main Street, Midland, GA 31820. The EIN for Jones Company is 36-1238975 and its address is 1825 Elkhart Way, Columbus, GA 31904.
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Q 7Q 7
If a taxpayer works more than one job, will the withholding from the various jobs necessarily cover his or her tax liability? Explain.
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Q 8Q 8
In addition to federal tax withholding, what other taxes are employers required to withhold from an employee's paycheck? How are the calculations made?
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Q 10Q 10
When are employees required to report tips to their employer? Are tips subject to the same withholding requirements as regular salary?
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Q 14Q 14
When must monthly and semiweekly schedule depositors make their deposits? What taxes must be deposited?
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Q 18Q 18
What are the rules for deducting COBRA assistance payments on Form 941 for the 2010 tax year?
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Q 22Q 22
How does an employer report wages to the employee, the federal government, and the Social Security Administration? When is this notification due?
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Q 26Q 26
Explain the provisions of backup withholding and the conditions under which an employer must comply with these provisions.
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Q 28Q 28
Explain the purpose of Form 1040-ES. Under what conditions are taxpayers required to file 1040-ES? When is Form 1040-ES filed?
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Q 29Q 29
Employees claim withholding allowances on Form W-4. Each withholding allowance claimed lowers their annual withholding base by what amount for calendar year 2010 a. $3,500.
B) $3,550.
C) $3,600.
D) $3,650. ?
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Multiple Choice
Q 30Q 30
Iesiah is single and is paid $1,213 per week and claims one allowance. What is the amount of federal income tax withheld on Iesiah's gross wages for the week? Use the wage bracket table in the appendix at the end of the chapter. a. $193.
B) $195.
C) $210.
D) $213
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Multiple Choice
Q 31Q 31
Latrice is married, is paid $2,435 semimonthly, and claims four withholding allowances. What is the amount of federal income tax withheld on Latrice's gross wages for the semimonthly period? Use the wage bracket table in the appendix at the end of the chapter. a. $162.
B) $165.
C) $168.
D) $188.
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Multiple Choice
Q 32Q 32
Erica earned $105,070 during 2010. How much will her employer withhold from her, in total, for FICA taxes? a. $8,023.50.
B) $8,032.50.
C) $8,037.86.
D) $8,073.86.
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Multiple Choice
Q 33Q 33
Doris has two jobs and earned $98,000 from her first job and $18,000 from her second job. How much total FICA taxes will Doris have withheld from her wages from working two jobs? a. $7,466.00.
B) $8,669.40.
C) $8,843.00.
D) $8,874.00.
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Multiple Choice
Q 34Q 34
Carlos earned a total of $150,000 for 2010. How much in FICA tax will his employer be required to withhold in his name? a. $6,621.60 in social security and $1,548.60 in Medicare.
B) $6,621.60 in social security and $2,175.00 in Medicare.
C) $9,300.00 in social security and $2,175.00 in Medicare.
D) $9,300.00 in social security and $1,548.60 in Medicare.
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Multiple Choice
Q 35Q 35
Ken has two jobs, and both employers withheld FICA tax. From his first job, he earned $85,000, and from his second job, he earned $25,000. How much can Ken claim as an additional payment on his Form 1040 as excess social security paid in 2010? a $0.
B) $86.80.
C) $198.40.
D) $248.00.
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Multiple Choice
Q 36Q 36
Sheila earned $75 in tips in September. When must she inform her employer of her tips on Form 4070 for federal income tax and FICA withholding purposes? a. By September 30.
B) By October 10.
C) By October 31.
D) She is not subject to payroll taxes on tips of less than $80 in any one month.
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Multiple Choice
Q 37Q 37
In a large food or beverage establishment, any tip shortfall from a directly tipped employee is recorded on the employee's W-2 as a. W-2 box 1- Wages, tips, other compensation.
B) W-2 box 14-Other.
C) W-2 box 8-Allocated tips.
D) W-2 box 7-Social security tips.
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Multiple Choice
Q 38Q 38
Employers with a payroll tax liability of less than $2,500 at the end of any quarter must pay their tax liability a. Directly to the authorized depository after the end of the quarter when Form 941 is filed.
B) Directly to the authorized depository on the same day the Form 941 is mailed.
C) Directly to the Internal Revenue Service when they file Form 941.
D) Directly only if they use the EFTPS form of payment before Form 941 is filed.
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Multiple Choice
Q 39Q 39
Lauer Company started its business on June 30, 2010. On July 9, it paid wages for the first time and accumulated a tax liability of $48,000. On Friday, July 23, it incurred a tax liability of $52,000. How is Lauer Company treated as a depositor? a. Monthly because new companies do not have a lookback period.
B) Semiweekly because its accumulated tax liability is $100,000.
C) Monthly because its accumulated tax liability is not more than $100,000 on any one day.
D) Semiweekly for this pay period only and then monthly for the remainder of the year.
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Multiple Choice
Q 40Q 40
What is the penalty for sending a required tax payment (unless specifically excluded) directly to the Internal Revenue Service? a. 2%.
B) 5%.
C) 10%.
D) 15%.
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Q 41Q 41
A semiweekly schedule depositor's payroll period ends and is paid on Friday, June 25. The depositor (employer) must deposit the federal taxes for this pay period on or before a. June 30.
B) June 26.
C) The following Wednesday.
D) The following Friday.
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Multiple Choice
Q 42Q 42
To what amount of employer tax accumulation does the one-day deposit rule apply? a. $75,000.
B) $100,000.
C) More than $100,000.
D) An amount between $75,000 and $99,999.
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Multiple Choice
Q 43Q 43
Employers are required to deposit FUTA taxes when their liability exceeds a. $100.
B) $500.
C) $1,000.
D) $1,500.
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Multiple Choice
Q 44Q 44
Household employees are subject to FICA withholding if they are paid at least what amount during any calendar quarter in 2010? a. $1,000.
B) $1,500.
C) $1,600.
D) $1,700.
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Multiple Choice
Q 45Q 45
Employers pay a maximum federal unemployment tax of 6.2% on how much of an employee's taxable wages for 2010? a. $1,700.
B) $3,650.
C) $5,700.
D) $7,000.
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Multiple Choice
Q 46Q 46
Carlos has two jobs; he is an attorney (not a partner) in a law firm and he has a small legal practice (sole proprietorship) providing real estate legal services. How does he compute his federal income tax for the year? a. His wages from the law firm are taxed as an employee, as are his wages from the private practice.
B) His wages from the law firm are considered self-employment, as are the earnings from his private practice.
C) His wages from the law firm are taxed as an employee, and his earnings from his private practice are taxed as a self-employed proprietor.
D) His wages from the law firm are taxed as an employee, and his earnings from self-employment are taxed up to the maximum for social security only.
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Multiple Choice
Q 47Q 47
Adrienne is a self-employed attorney. She has net earnings (profit) from her practice of $80,500. Her self-employment taxes for the year are: a. $9,982.00.
B) $11,374.29.
C) $12,919.12.
D) $12,316.50.
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Multiple Choice
Q 48Q 48
Carol works for ABC Company and earned $63,000 for 2010. How much in FUTA tax is her employer required to withhold in her name? Assume that the employer receives the maximum credit for state unemployment taxes. a. $0.
B) $56.
C) $378.
D) $434.
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Multiple Choice
Q 49Q 49
On January 2, 2010, Jane employed a part-time household worker in her home. She paid the household worker $300 per month for 2010. What amount of FICA tax is Jane required to record on Schedule H? a. $168.30.
B) $275.40.
C) $336.60.
D) $550.80.
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Multiple Choice
Q 50Q 50
A taxpayer with 2010 AGI of $160,000 has no income tax withholding and is required to pay estimated taxes. The taxpayer can avoid an underpayment penalty by paying a. At least 90% of the 2010 tax liability ratably over four quarterly payments.
B) At least 100% of the 2009 tax liability ratably over four quarterly payments.
C) At least 90% of the 2009 tax liability ratably over four quarterly payments.
D) 100% of the 2010 tax liability ratably over four quarterly payments.
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Multiple Choice
Q 51Q 51
Henry received a bonus of $4,400 from his employer. Which one of the following federal income withholding tax amounts is not in accordance with IRS rules regarding supplemental wage payments? Henry earns biweekly wages of $3,500, is single, and claims one allowance. Assume his employer uses the percentage method of withholding. a. $1,285.84 on his bonus if taxes were already withheld from his regular pay.
B) $1,604.32 if his bonus and wages are paid at the same time during the pay period.
C) $1,776.32 if his bonus is taxed at the supplemental wage percent and added to his regular wages paid in the same period.
D) $1,962.16 if his bonus and wages are paid at the same time during the pay period.
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Multiple Choice
Q 52Q 52
Allison is paid $470 per week. What is the amount of federal income tax withheld from Allison's paycheck under the following conditions? Use the percentage method table in the appendix to this chapter.
a. Allison is single and claims three withholding allowances
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Q 53Q 53
Martin is married and claims five exemptions on his W-4. What is his federal income tax withholding under the following conditions? Use the percentage method table in the appendix to this chapter.
a. Martin is paid semimonthly, and his gross pay is $2,300 per paycheck.
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Q 54Q 54
Lisa earns $64,480 per year. She is married and claims two allowances. Use the wage bracket tables available online or the percentage method tables in the appendix to this chapter.
a. If she is paid weekly, what is her withholding per paycheck?
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Q 55Q 55
Henry, who earned $78,500 during 2010, is paid on a monthly basis, is married, and claims four allowances.
a. What is Henry's federal tax withholding for each period?
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Q 56Q 56
Roberto's salary is $108,600 in 2010 Roberto is paid on a semimonthly basis, is single, and claims one allowance
a. What is Roberto's federal tax withholding per pay period?
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Q 57Q 57
Baker Company is trying to determine how often it needs to deposit payroll taxes for calendar year 2010. The company made the following quarterly payroll tax deposits during the last two years:
a. What is the lookback period and amount?
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Q 58Q 58
CFG Company has the following employees:
CFG receives the maximum credit for state unemployment taxes. Calculate the FUTA tax that CFG Company would owe for the year.
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Q 59Q 59
Jacob Turner hired Jen Hatcher to clean his house starting on January 2 at $55 per week. Jacob does not withhold any federal taxes. Assume that Jen does not clean houses for anyone else. Assume Jacob paid $1,000 in wages for the fourth quarter of 2009.
a. How much in payroll taxes should Jacob pay?
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Q 60Q 60
Jones Company has the following employees on payroll:
Calculate the payroll for the last pay period in April. Include in your calculations federal withholding, social security and Medicare taxes.
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Q 61Q 61
Allison is paid $470 per week. What is the amount of federal income tax withheld from Allison's paycheck under the following conditions? Use the percentage method table in the appendix to this chapter.
b. Allison is married and claims three withholding allowances
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Q 62Q 62
Allison is paid $470 per week. What is the amount of federal income tax withheld from Allison's paycheck under the following conditions? Use the percentage method table in the appendix to this chapter.
c. Allison is single and claims one withholding allowance.
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Q 63Q 63
Martin is married and claims five exemptions on his W-4. What is his federal income tax withholding under the following conditions? Use the percentage method table in the appendix to this chapter.
b. Martin is paid monthly, and his gross pay is $2,600 per paycheck.
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Q 64Q 64
Martin is married and claims five exemptions on his W-4. What is his federal income tax withholding under the following conditions? Use the percentage method table in the appendix to this chapter.
c. Martin is paid weekly, and his gross pay is $3,300 per paycheck.
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Q 65Q 65
Lisa earns $64,480 per year. She is married and claims two allowances. Use the wage bracket tables available online or the percentage method tables in the appendix to this chapter.
b. If she is paid monthly, what is her withholding per paycheck?
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Q 66Q 66
Lisa earns $64,480 per year. She is married and claims two allowances. Use the wage bracket tables available online or the percentage method tables in the appendix to this chapter.
c. If she is paid semimonthly, what is her withholding per paycheck?
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Q 67Q 67
Lisa earns $64,480 per year. She is married and claims two allowances. Use the wage bracket tables available online or the percentage method tables in the appendix to this chapter.
d. In each of these circumstances, should the annual withholding differ? Explain.
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Q 68Q 68
Henry, who earned $78,500 during 2010, is paid on a monthly basis, is married, and claims four allowances.
b. What is Henry's FICA withholding for each period?
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Q 69Q 69
Roberto's salary is $108,600 in 2010 Roberto is paid on a semimonthly basis, is single, and claims one allowance
b. What is Roberto's FICA withholding per pay period before he reaches the social security limit?
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Q 70Q 70
Roberto's salary is $108,600 in 2010 Roberto is paid on a semimonthly basis, is single, and claims one allowance
c. What is Roberto's FICA withholding per pay period after he reaches the social security limit?
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Q 71Q 71
Baker Company is trying to determine how often it needs to deposit payroll taxes for calendar year 2010. The company made the following quarterly payroll tax deposits during the last two years:
b. In 2010, how often must Baker Company make payroll deposits?
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Q 72Q 72
Jacob Turner hired Jen Hatcher to clean his house starting on January 2 at $55 per week. Jacob does not withhold any federal taxes. Assume that Jen does not clean houses for anyone else. Assume Jacob paid $1,000 in wages for the fourth quarter of 2009.
b. Complete the Schedule H that Jacob must file.
c. When should Schedule H be filed?
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Q 73Q 73
Jacob Turner hired Jen Hatcher to clean his house starting on January 2 at $55 per week. Jacob does not withhold any federal taxes. Assume that Jen does not clean houses for anyone else. Assume Jacob paid $1,000 in wages for the fourth quarter of 2009.
c. When should Schedule H be filed?
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