Question 1

By completing Form W-4P, a person can elect to have no income tax withheld from the annuity amounts the person receives.

Accepted Answer

A) True 
 B)False  True

Question 2

In calculating a "gross-up" amount of a bonus payment, an employer does not use the OASDI/HI tax rates in the formula.

Accepted Answer

A) True 
 B)False  False

Question 3

Noncash fringe benefits that are provided employees are treated as nontaxable income and thus are excluded from federal income tax withholding.

Accepted Answer

A) True 
 B)False  False

Question 4

In the IRA form of the Simple Retirement Account, employers must match the employee's contribution, dollar-for-dollar, up to 3% of the employee's compensation.

Accepted Answer

A) True 
 B)False

Question 5

For state income tax purposes, all states treat 401(k) plan payroll deductions as nontaxable.

Accepted Answer

A) True 
 B)False

Question 6

A company must withhold federal income taxes from payments made to independent contractors in which of the following cases?

Accepted Answer

A) When there is a signed contract between the parties 
B) When the contractor is paid more than $10,000 
C) When the contractor is a corporation 
D) When the contractor has not provided a taxpayer identification number and the contract is $600 or more 
E) All of the above 
A) When there is a signed contract between the parties 
B) When the contractor is paid more than $10,000 
C) When the contractor is a corporation 
D) When the contractor has not provided a taxpayer identification number and the contract is $600 or more 
E) All of the above

Question 7

The IRA format of the SIMPLE plan allows employees to make tax-free contributions of up to $12,500.

Accepted Answer

A) True 
 B)False

Question 8

The special withholding allowance may be claimed only by those employees who do not itemize deductions on their income tax returns.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following cannot be included in a cafeteria plan?

Accepted Answer

A) Health insurance 
B) Group-term life insurance (first $50,000 of coverage) 
C) Dependent care assistance (first $5,000) 
D) Self-insured medical reimbursement plan 
E) Educational assistance 
A) Health insurance 
B) Group-term life insurance (first $50,000 of coverage) 
C) Dependent care assistance (first $5,000) 
D) Self-insured medical reimbursement plan 
E) Educational assistance

Question 10

All taxable noncash fringe benefits received during the year can only be added to the employees' taxable pay on the last payday of the year.

Accepted Answer

A) True 
 B)False

Question 11

Under the federal income tax withholding law, income taxes are not withheld from the value of meals that employers furnish workers on the employers' premises for the employers' convenience.

Accepted Answer

A) True 
 B)False

Question 12

An employer must file an information return under all of the following conditions except:

Accepted Answer

A) to report $1,000 of compensation paid to an individual who is not an employee. 
B) to report the wages totaling $600 paid to an independent contractor during the calendar year. 
C) to report dividends totaling $600 paid to an individual during the calendar year. 
D) to report commissions of $500 paid to a self-employed salesman. 
E) An information return must be filed under each of the above conditions. 
A) to report $1,000 of compensation paid to an individual who is not an employee. 
B) to report the wages totaling $600 paid to an independent contractor during the calendar year. 
C) to report dividends totaling $600 paid to an individual during the calendar year. 
D) to report commissions of $500 paid to a self-employed salesman. 
E) An information return must be filed under each of the above conditions.

Question 13

If you, an employer, are filing 550 Forms W-2, you must use electronic filing rather than paper Forms W-2.

Accepted Answer

A) True 
 B)False

Question 14

The standard deduction varies according to whether the wage-bracket method or the percentage method is used.

Accepted Answer

A) True 
 B)False

Question 15

There is no limit to the amount of educational assistance that is exempt from federal income tax withholdings.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following forms is used to report the amount of distributions from pension and retirement plans?

Accepted Answer

A) Form W-2c 
B) Form 1099-R 
C) Form 1099-PEN 
D) Form W-3p 
E) Form W-4 
A) Form W-2c 
B) Form 1099-R 
C) Form 1099-PEN 
D) Form W-3p 
E) Form W-4

Question 17

Form W-3 is filed with the Social Security Administration when transmitting information returns on Forms W-2.

Accepted Answer

A) True 
 B)False

Question 18

Arch gives you an amended Form W-4 dated March 11, 2016, on which he claims two additional withholding allowances.He asks you to refund the excess taxes that were deducted from January 1 to March 11 when Arch claimed only one withholding allowance.You should:

Accepted Answer

A) repay the overwithheld taxes on Arch's next payday. 
B) tell Arch that you will spread out a refund of the overwithheld taxes equally over the next six pays. 
C) inform Arch that you are unable to repay the overwithheld taxes that were withheld before March 11 and that the adjustment will have to be made when he files his annual income tax return. 
D) tell Arch to write the IRS immediately and ask for a refund of the overwithheld taxes. 
E) inform Arch that you will appoint a committee to study his request. 
A) repay the overwithheld taxes on Arch's next payday. 
B) tell Arch that you will spread out a refund of the overwithheld taxes equally over the next six pays. 
C) inform Arch that you are unable to repay the overwithheld taxes that were withheld before March 11 and that the adjustment will have to be made when he files his annual income tax return. 
D) tell Arch to write the IRS immediately and ask for a refund of the overwithheld taxes. 
E) inform Arch that you will appoint a committee to study his request.

Question 19

On August 3, Hunt filed an amended Form W-4 to show a decrease in the number of allowances claimed.Hunt's employer must put the new withholding allowance certificate into effect before the next weekly payday on August 5.

Accepted Answer

A) True 
 B)False

Question 20

Before any federal income taxes may be withheld, there must be, or must have been, an employer-employee relationship.

Accepted Answer

A) True 
 B)False

By completing Form W-4P, a person can elect to have no income tax withheld from the annuity amounts the person receives.

In calculating a "gross-up" amount of a bonus payment, an employer does not use the OASDI/HI tax rates in the formula.

Noncash fringe benefits that are provided employees are treated as nontaxable income and thus are excluded from federal income tax withholding.

In the IRA form of the Simple Retirement Account, employers must match the employee's contribution, dollar-for-dollar, up to 3% of the employee's compensation.

For state income tax purposes, all states treat 401(k) plan payroll deductions as nontaxable.

A company must withhold federal income taxes from payments made to independent contractors in which of the following cases?

The IRA format of the SIMPLE plan allows employees to make tax-free contributions of up to $12,500.

The special withholding allowance may be claimed only by those employees who do not itemize deductions on their income tax returns.

Which of the following cannot be included in a cafeteria plan?

All taxable noncash fringe benefits received during the year can only be added to the employees' taxable pay on the last payday of the year.

Under the federal income tax withholding law, income taxes are not withheld from the value of meals that employers furnish workers on the employers' premises for the employers' convenience.

An employer must file an information return under all of the following conditions except:

If you, an employer, are filing 550 Forms W-2, you must use electronic filing rather than paper Forms W-2.

The standard deduction varies according to whether the wage-bracket method or the percentage method is used.

There is no limit to the amount of educational assistance that is exempt from federal income tax withholdings.

Which of the following forms is used to report the amount of distributions from pension and retirement plans?

Form W-3 is filed with the Social Security Administration when transmitting information returns on Forms W-2.

Arch gives you an amended Form W-4 dated March 11, 2016, on which he claims two additional withholding allowances.He asks you to refund the excess taxes that were deducted from January 1 to March 11 when Arch claimed only one withholding allowance.You should:

On August 3, Hunt filed an amended Form W-4 to show a decrease in the number of allowances claimed.Hunt's employer must put the new withholding allowance certificate into effect before the next weekly payday on August 5.

Before any federal income taxes may be withheld, there must be, or must have been, an employer-employee relationship.

The Need for Payroll and Personal Records

Computing Wages and Salaries

Social Security Taxes

Unemployment Compensation Taxes

Analyzing and Journalizing Payroll

Filters

Exam 4: Income Tax Withholding

By completing Form W-4P, a person can elect to have no income tax withheld from the annuity amounts the person receives.

In calculating a "gross-up" amount of a bonus payment, an employer does not use the OASDI/HI tax rates in the formula.

Noncash fringe benefits that are provided employees are treated as nontaxable income and thus are excluded from federal income tax withholding.

In the IRA form of the Simple Retirement Account, employers must match the employee's contribution, dollar-for-dollar, up to 3% of the employee's compensation.

For state income tax purposes, all states treat 401(k) plan payroll deductions as nontaxable.

A company must withhold federal income taxes from payments made to independent contractors in which of the following cases?

The IRA format of the SIMPLE plan allows employees to make tax-free contributions of up to $12,500.

The special withholding allowance may be claimed only by those employees who do not itemize deductions on their income tax returns.

Which of the following cannot be included in a cafeteria plan?

All taxable noncash fringe benefits received during the year can only be added to the employees' taxable pay on the last payday of the year.

Under the federal income tax withholding law, income taxes are not withheld from the value of meals that employers furnish workers on the employers' premises for the employers' convenience.

An employer must file an information return under all of the following conditions except:

If you, an employer, are filing 550 Forms W-2, you must use electronic filing rather than paper Forms W-2.

The standard deduction varies according to whether the wage-bracket method or the percentage method is used.

There is no limit to the amount of educational assistance that is exempt from federal income tax withholdings.

Which of the following forms is used to report the amount of distributions from pension and retirement plans?

Form W-3 is filed with the Social Security Administration when transmitting information returns on Forms W-2.

Arch gives you an amended Form W-4 dated March 11, 2016, on which he claims two additional withholding allowances.He asks you to refund the excess taxes that were deducted from January 1 to March 11 when Arch claimed only one withholding allowance.You should:

On August 3, Hunt filed an amended Form W-4 to show a decrease in the number of allowances claimed.Hunt's employer must put the new withholding allowance certificate into effect before the next weekly payday on August 5.

Before any federal income taxes may be withheld, there must be, or must have been, an employer-employee relationship.

The Need for Payroll and Personal Records

Computing Wages and Salaries

Social Security Taxes

Unemployment Compensation Taxes

Analyzing and Journalizing Payroll

Filters