Exam 3: Social Security Taxes

Employers must withhold FICA taxes on payments that are made to independent contractors.

OASDI taxes are levied when the wages are earned by , rather than when paid to , employees.

All employers of one or more persons must file an application for an identification number.

Which of the following deposit requirements pertains to a semiweekly depositor who has accumulated employment taxes of $17,500 on payday, Saturday, May 16, 20--?

FICA does not consider the first six months of sick pay as taxable wages.

Each of the following items is accurately defined under FICA as taxable wages except :

A monthly depositor's employment taxes total $3,800 on Wednesday, March 31, 20--, the end of the calendar quarter. The taxes should be deposited on or before the following Tuesday (April 6).

Instruction 3-1 Use the following tax rates and taxable wage bases: Employees' and Employer's OASDI-6.2% both on $132,900; HI-1.45% for employees and employers on the total wages paid. Employees' Supplemental HI of 0.9 percent on wages in excess of $200,000 was not applicable. Refer to Instruction 3-1. During 20--, Amanda Hines, president of Dunne, Inc., was paid a semimonthly salary of $7,100. Determine the following amounts.

Employees of a state government hired before January 1, 1986, and covered by a public retirement plan, are exempt from FICA coverage.

The FICA tax rates and taxable wage bases are exactly the same for the employee and employer when the employee makes $200,000 or less.

Under FICA, employers must collect the employee's FICA taxes on tips reported by each employee.

Instruction 3-1 *Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimals places (round the hourly rate to 2 decimal places     before multiplying by one and one-half to determine the overtime rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. Refer to Instruction 3-1 . Jax Company's (a monthly depositor) tax liability (amount withheld from employees' wages for federal income tax and FICA tax plus the company's portion of the FICA tax) for July was $1,210. No deposit was made by the company until August 24, 20-- (9 days late). Determine: a) The date by which the deposit should have been made b) The penalty for failure to make timely deposit c) The penalty for failure to fully pay tax when due d) The interest on taxes due and unpaid (assume a 5% interest rate)

A child working for his father's corporation is not exempt from coverage under FICA.

On Schedule B of Form 941, the employer does not show the date of each tax deposit during the quarter.

Instruction 3-1 *Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimals places (round the hourly rate to 2 decimal places     before multiplying by one and one-half to determine the overtime rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. Refer to Instruction 3-1 . In this pay, Moss Company deducted OASDI taxes of $5,276.24 and HI taxes of $1,233.95 from the $85,100.90 of taxable wages paid. What is Moss Company's portion of the social security taxes for: a) OASDI b) HI

Employers who file Form 941 electronically are given an extra 10 days from the normal due date to make their deposits.

Every employer has the right to choose the method (electronic or paper coupon) of depositing employment taxes.

Instruction 3-1 Use the following tax rates and taxable wage bases: Employees' and Employer's OASDI-6.2% both on $132,900; HI-1.45% for employees and employers on the total wages paid. Employees' Supplemental HI of 0.9 percent on wages in excess of $200,000 was not applicable. Refer to Instruction 3-1. Karlie Hastings is a writer (employee) for the Santa Fe Gazette and has an annual salary of $49,000. This year, she also realized net self-employment earnings of $85,000 from a book she wrote. What portion of her self-employment earnings is subject to the two parts of the social security tax?

If on any day during a deposit period an employer has accumulated $100,000 or more in undeposited employment taxes, the taxes must be deposited on the next banking day.

The OASDI taxable wage base is correctly defined as: