Question 1

Electronic tax deposits are usually processed through the:

Accepted Answer

Electronic tax deposits are usually processed through the Electronic Federal Tax Payment System (EFTPS). The other options, AFTPS, ESTPF, and EPS, do not exist or are not commonly used for electronic tax deposits.

Question 2

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(0.1%),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 = $5,349.23

Question 3

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 4

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 $128,400?

Accepted Answer

The employer's annual FICA tax responsibility for Jeremiah's salary is $11,078.30. This is calculated as follows:Social Security tax: 6.2% x $128,400 = $7,984.80Medicare tax: 1.45% x $128,400 = $1,862.40Total FICA tax: $7,984.80 + $1,862.40 = $11,078.30

Question 5

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

Accepted Answer

Statutory deductions are mandatory employer-paid payroll taxes, which include Social Security tax, Medicare tax, and federal and state unemployment taxes.

Question 6

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 SUTA tax is calculated on the wage base of $28,200. Only Annabelle and Michael have earnings above this base, so their taxable wages are capped at $28,200. Beatrice and Howard's earnings are below the base, so their full earnings are taxable. The total taxable wages are $28,200 (Annabelle) + $24,880 (Beatrice) + $28,200 (Michael) + $26,500 (Howard) = $107,780. The SUTA tax liability is 4.5% of $107,780, which equals $4,850.10.

Question 7

Schedule B must accompany Form 941 for a firm classified as a semiweekly payroll tax depositor.

Accepted Answer

Schedule B is required to be filed with Form 941 for semiweekly payroll tax depositors in order to report their tax liability and make timely deposits.

Question 8

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

Accepted Answer

Form 941 is filed quarterly by employers to report payroll taxes, not more frequently based on deposit schedules.

Question 9

FUTA tax rates vary from state to state.

Accepted Answer

FUTA taxes are a federal tax, and therefore the tax rates are the same for all states. However, some states may have additional state unemployment taxes that employers are required to pay along with FUTA taxes. These state unemployment taxes vary by state.

Question 10

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 FUTA tax rate is 6.0% on the first $7,000 of wages per employee. With 16 employees, the taxable wage base is 16 x $7,000 = $112,000. The FUTA tax liability is 6.0% of $112,000, which equals $6,720. However, employers can receive a credit of up to 5.4% for state unemployment taxes, reducing the effective FUTA rate to 0.6%. Therefore, the liability is 0.6% of $112,000, which is $672.00.

Question 11

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

Accepted Answer

This is true. Employers are required to file quarterly and annual reports, and failure to do so may result in monetary penalties.

Question 12

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 13

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

Accepted Answer

The frequency of tax deposits for a firm is determined by the amount of payroll tax liability during the lookback period. This includes factors, such as the amount of tax owed and the payment schedule of the firm.

Question 14

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

The answer of On a recent paycheck,Mayim's taxes were as...

Question 15

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

FICA taxes and FUTA tax are employer responsibilities, but federal income tax is withheld from employee wages and paid by the employee.

Question 16

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 for reporting wages to independent contractors, but rather for summarizing and transmitting Forms W-2, Wage and Tax Statement, to the Social Security Administration (SSA). It is due by January 31 of the following year. Form 1096 is typically used to report payments made to independent contractors.

Question 17

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

Accepted Answer

FUTA taxes are unemployment taxes paid solely by the employer, while SUTA taxes are typically shared with the employee. Federal income tax and FICA taxes are payroll taxes that are shared between the employer and employee.

Question 18

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

The FUTA tax rate is 6% on the first $7,000 of each employee's earnings. Therefore, the tax liability is calculated as follows: Will ($7,000 x 0.06 = $420), Adalia ($7,000 x 0.06 = $420), Brian ($7,000 x 0.06 = $420), and Amanda ($6,500 x 0.06 = $390). However, the maximum FUTA tax credit is 5.4%, reducing the effective rate to 0.6%. Therefore, the total liability is ($7,000 x 0.006 x 3) + ($6,500 x 0.006) = $165.

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

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

Accepted Answer

The term for the employer's mandatory payroll taxes that the government has written into law is statutory deductions. This includes taxes such as Social Security, Medicare, and federal and state income taxes, among others.

Quiz 6: Employer Payroll Taxes and Labor Planning