Exam 3: Social Security Taxes

Year-end bonuses paid to employees are not subject to the hospital insurance (HI) part of the FICA tax.

A monthly depositor is one who reported employment taxes of $50,000 or more for the four quarters in the lookback period.

Which of the following payments are not taxable for FICA?

Employees may use Form 4070 to report the amount of their tips to their employers.

Payments made to a worker's spouse for hospital expenses in connection with an accident disability are not considered wages under FICA.

Lidge Company of Texas (TX) is classified as a monthly depositor and pays its employees monthly.  The following payroll information is for the second quarter of 20--. The number of employees on June 12, 20-- was 11. a.   Complete the following portion of Form 941. Source: Internal Revenue Service b.  Complete the following portion of Form 941.   Source: Internal Revenue Service c.  Complete Part 2 of Form 941.     Source: Internal Revenue Service d.  What are the payment due dates of each of the monthly liabilities assuming all deposits were made on time, and the due date of the filing of Form 941 (year 20--)?

Employees are liable for their FICA taxes only until the taxes have been collected from their pay by their employer.

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 . On the last weekly pay of the first quarter, Lorenz is paid her current pay of $90 per day for four days worked and one day sick pay (total-$450). She is also paid her first quarter commission of $1,200 in this pay. How much will be deducted for:

Instruction 3-1 Use the following tax rates, ceiling and maximum taxes: Employee and Employer OASDI:     6.20%                  $132,900                          $8,239.80 Employee* and Employer HI:           1.45%                  No limit                           No maximum Self-employed OASDI:                      12.4%                  $132,900                        $16,479.60 Self-employed HI:                                2.9%                    No limit                          No maximum *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 . Beginning with the first pay of the year, Carson will make $2,700 each week. In which numbered pay of the year will Carson hit the OASDI taxable limit?

A worker hired by the federal government after 1983 is covered under FICA.

An employer's portion of social security and withheld income taxes for the quarter are less than $2,500. The employer must deposit the taxes at its bank at the time of filing the fourth quarter Form 941.

Which of the following deposit requirements pertains to a monthly depositor who has accumulated employment taxes of $2,900 at the end of October?

If an employer fails to file an employment tax return on the due date, a penalty based on a certain percentage of the amount of tax required to be reported may be added to the tax.

Noncash items given to household employees by their employers are subject to FICA tax.