Question 1

Which of the following statements is true?

Accepted Answer

A) A distribution rollover from a retirement plan can only be done as a direct transfer from one account to another account. 
B) The trustee must withhold 10 percent of the amount distributed whenever assets are transferred from one retirement plan to another retirement plan. 
C) If a taxpayer decides to rollover an IRA to a new account, then the whole IRA must be rolled over. 
D) A taxpayer is allowed only one direct transfer each year from one retirement account to another retirement account. 
E) There are no current-year tax consequences for a direct transfer. 
A) A distribution rollover from a retirement plan can only be done as a direct transfer from one account to another account. 
B) The trustee must withhold 10 percent of the amount distributed whenever assets are transferred from one retirement plan to another retirement plan. 
C) If a taxpayer decides to rollover an IRA to a new account, then the whole IRA must be rolled over. 
D) A taxpayer is allowed only one direct transfer each year from one retirement account to another retirement account. 
E) There are no current-year tax consequences for a direct transfer. E

Question 2

An employee is reimbursed for travel and other ordinary and necessary expenses. Under what circumstances would income tax be withheld from the employee on these amounts?

Accepted Answer

Reimbursements of travel and other employee business expense made under a nonaccountable plan must be included as wages and the amounts are subject to withholding. The amount of withholding may vary with the type of nonaccountable plan in use.

Question 3

Sally is an employer with one employee, Sara. Sara earned $12,000 from January 1, 2019 through June 30, 2019, and the state unemployment tax rate is 5.4 percent. Calculate the following amount for Sally.
a.FUTA tax after the state tax credit
b.What form should Sally use to report her FUTA tax liability for 2019?

Accepted Answer

a. $\quad \$ 42 = \$ 7,000 \times 0.6 \%$
b. Form 940

Question 4

The FUTA tax is paid by:

Accepted Answer

A) Employees only. 
B) Employers only. 
C) Employers and employees. 
D) Neither employers nor employees. 
E) The federal government. 
A) Employees only. 
B) Employers only. 
C) Employers and employees. 
D) Neither employers nor employees. 
E) The federal government.

Question 5

Gambling winnings must be reported to the IRS, but withholding of taxes on winnings is never required.

Accepted Answer

A) True 
 B)False

Question 6

What percentage of gross food and beverage sales is used in determining the amount of tips that an employer must report as allocated to employees?

Accepted Answer

A) 8 percent 
B) 10 percent 
C) 12 percent 
D) 15 percent 
E) None of these 
A) 8 percent 
B) 10 percent 
C) 12 percent 
D) 15 percent 
E) None of these

Question 7

Payors are required to use backup withholding if:

Accepted Answer

A) The taxpayer did not give the payor his or her taxpayer identification number. 
B) The taxpayer fails to certify that he or she is not subject to backup withholding. 
C) The IRS informs the payor that the taxpayer gave an incorrect identification number. 
D) The IRS informs the payor to start withholding because the taxpayer has not reported the income on his or her tax return. 
E) All of these will require the use of backup withholding 
A) The taxpayer did not give the payor his or her taxpayer identification number. 
B) The taxpayer fails to certify that he or she is not subject to backup withholding. 
C) The IRS informs the payor that the taxpayer gave an incorrect identification number. 
D) The IRS informs the payor to start withholding because the taxpayer has not reported the income on his or her tax return. 
E) All of these will require the use of backup withholding

Question 8

If an employee does not complete a Form W-4, the employer must withhold tax as if the employee were single with no exemptions.

Accepted Answer

A) True 
 B)False

Question 9

The Foemina Corporation has two employees, Nancy and Penny.

a.If Nancy earns wages of $17,000 for 2019, calculate the total amount of the FICA tax that must be paid:
by Nancy
?by Foemina Corporation
?Total
?
?
b.If Penny earns wages of $135,000 for 2019, calculate the total amount of the FICA tax that must be paid:
?by Penny
?by Foemina Corporation
?Total

Accepted Answer

The answer of The Foemina Corporation has two employees, Nancy...

Question 10

For each of the following payments, indicate the form (Form W-2, W-4, W-2G, 1099-B, 1099-DIV, 1099-INT, 1099-MISC, or 1099-R) that should be used to report the payment.
​
a.Dividends from a mutual fund
b.Las Vegas gambling winnings
c.Interest paid by a bank
d.Payment of salary and commissions to an employee
e.Distribution from an IRA account

Accepted Answer

The answer of For each of the following payments, indicate...

Question 11

Johnice's employer contributes $3,000 to a qualified retirement plan in 2019 for Johnice's retirement.
a.Is the $3,000 deductible by Johnice's employer in 2019? Explain.
b.Is the $3,000 income to Johnice in 2019? Explain.
c.Is either the interest or dividend earnings on the $3,000 contribution taxable to Johnice in 2019? Explain.

Accepted Answer

The answer of Johnice's employer contributes $3,000 to a qualified...

Question 12

Clay changes jobs in 2019 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA. He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen.
What are the tax consequences of the transfer to Clay? Explain.

Accepted Answer

There are no tax consequences.

Question 13

Taxpayers with large amounts of deductions may claim extra withholding allowances on their Form W-4s.

Accepted Answer

A) True 
 B)False

Question 14

If an individual taxpayer discovers that his or her original estimate for estimated tax payments was inaccurate, the taxpayer should continue to make payments based on the original estimate and pay any additional amount or request any refund when the tax return is filed.

Accepted Answer

A) True 
 B)False

Question 15

Janet is single and claims two allowances on her Form W-4. In 2019, her salary is $1,900 per month.
​
a.Use the percentage method to calculate the amount of Janet's withholding for a monthly pay period.
b.Use the withholding tables to determine the amount of Janet's withholding for a monthly pay period.​

Accepted Answer

The answer of Janet is single and claims two allowances...

Question 16

Which of the following taxpayers are not required to make estimated payments?

Accepted Answer

A) A car mechanic who is self-employed and earns $50,000 a year. 
B) A wealthy individual whose earnings are from corporate dividends. 
C) An employee who works at a local department store with appropriate withholding and no other income. 
D) All of these must make estimated payments. 
A) A car mechanic who is self-employed and earns $50,000 a year. 
B) A wealthy individual whose earnings are from corporate dividends. 
C) An employee who works at a local department store with appropriate withholding and no other income. 
D) All of these must make estimated payments.

Question 17

The Social Security portion of the FICA tax is imposed at a rate of (not including any additional tax for high-income earners):

Accepted Answer

A) 6.2 percent for the employee and 7.65 percent for the employer. 
B) 6.2 percent for only the employer. 
C) 6.2 percent for only the employee. 
D) 6.2 percent for the employee and 6.2 percent for the employer. 
E) None of these. 
A) 6.2 percent for the employee and 7.65 percent for the employer. 
B) 6.2 percent for only the employer. 
C) 6.2 percent for only the employee. 
D) 6.2 percent for the employee and 6.2 percent for the employer. 
E) None of these.

Question 18

Karen is single with no dependents and earns $18,000 a year. She gives her employer a Form W-4 on which she claims 17 allowances. What is her employer required to do about the Form W-4? Explain.

Accepted Answer

If the employer is aware that the W-4 is

Question 19

Richard is employed by a major defense contractor and earns $156,000 in 2019. Calculate:
a. The amount of Social Security tax withheld from his income
b. The amount of Medicare tax withheld from his income
c. The amount of FUTA withheld from his income

Accepted Answer

a. $132,900 maximum times 6.2%

Question 20

Taxpayers with self-employment income who also have Form W-2 wage income from employment may be able to avoid making estimated tax payments by filing a Form W-4 and increasing the amount of their withholding.

Accepted Answer

A) True 
 B)False

Which of the following statements is true?

An employee is reimbursed for travel and other ordinary and necessary expenses. Under what circumstances would income tax be withheld from the employee on these amounts?

The FUTA tax is paid by:

Gambling winnings must be reported to the IRS, but withholding of taxes on winnings is never required.

What percentage of gross food and beverage sales is used in determining the amount of tips that an employer must report as allocated to employees?

Payors are required to use backup withholding if:

If an employee does not complete a Form W-4, the employer must withhold tax as if the employee were single with no exemptions.

Clay changes jobs in 2019 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA. He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. What are the tax consequences of the transfer to Clay? Explain.

Taxpayers with large amounts of deductions may claim extra withholding allowances on their Form W-4s.

If an individual taxpayer discovers that his or her original estimate for estimated tax payments was inaccurate, the taxpayer should continue to make payments based on the original estimate and pay any additional amount or request any refund when the tax return is filed.

Which of the following taxpayers are not required to make estimated payments?

The Social Security portion of the FICA tax is imposed at a rate of (not including any additional tax for high-income earners):

Karen is single with no dependents and earns $18,000 a year. She gives her employer a Form W-4 on which she claims 17 allowances. What is her employer required to do about the Form W-4? Explain.

Richard is employed by a major defense contractor and earns $156,000 in 2019. Calculate: a. The amount of Social Security tax withheld from his income b. The amount of Medicare tax withheld from his income c. The amount of FUTA withheld from his income

Taxpayers with self-employment income who also have Form W-2 wage income from employment may be able to avoid making estimated tax payments by filing a Form W-4 and increasing the amount of their withholding.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses

Additional Income and the Qualified Business Income Deduction

Deductions for and From AGI

Accounting Periods and Other Taxes

Tax Credits

Depreciation and Sale of Business Property

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 9: Payroll, Estimated Payments and Retirement Plans

Which of the following statements is true?

An employee is reimbursed for travel and other ordinary and necessary expenses. Under what circumstances would income tax be withheld from the employee on these amounts?

The FUTA tax is paid by:

Gambling winnings must be reported to the IRS, but withholding of taxes on winnings is never required.

What percentage of gross food and beverage sales is used in determining the amount of tips that an employer must report as allocated to employees?

Payors are required to use backup withholding if:

If an employee does not complete a Form W-4, the employer must withhold tax as if the employee were single with no exemptions.

Clay changes jobs in 2019 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA. He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. What are the tax consequences of the transfer to Clay? Explain.

Taxpayers with large amounts of deductions may claim extra withholding allowances on their Form W-4s.

If an individual taxpayer discovers that his or her original estimate for estimated tax payments was inaccurate, the taxpayer should continue to make payments based on the original estimate and pay any additional amount or request any refund when the tax return is filed.

Which of the following taxpayers are not required to make estimated payments?

The Social Security portion of the FICA tax is imposed at a rate of (not including any additional tax for high-income earners):

Karen is single with no dependents and earns $18,000 a year. She gives her employer a Form W-4 on which she claims 17 allowances. What is her employer required to do about the Form W-4? Explain.

Richard is employed by a major defense contractor and earns $156,000 in 2019. Calculate: a. The amount of Social Security tax withheld from his income b. The amount of Medicare tax withheld from his income c. The amount of FUTA withheld from his income

Taxpayers with self-employment income who also have Form W-2 wage income from employment may be able to avoid making estimated tax payments by filing a Form W-4 and increasing the amount of their withholding.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses

Additional Income and the Qualified Business Income Deduction

Deductions for and From AGI

Accounting Periods and Other Taxes

Tax Credits

Depreciation and Sale of Business Property

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters