Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

Cash tips of $20 dollars or more in a month must be reported to the employer by the tipped employee by the end of the following month.

Accepted Answer

A) True 
 B)False  False

Question 3

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 4

Employee's payroll deductions into their 401(K) plans are generally made on a pretax basis and reduce the amount of gross pay that is subject to federal income tax withholding.

Accepted Answer

A) True 
 B)False

Question 5

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 6

If an employee files an amended W-4, the employer must make the W-4 effective no later than the

Accepted Answer

A)  next payday 
B)  start of the first payroll period ending on or after the 30th day from the W-4 receipt date 
C)  10th day from the W-4 receipt date 
D)  first pay in the next quarter 
E)  first pay in the next year 
A)  next payday 
B)  start of the first payroll period ending on or after the 30th day from the W-4 receipt date 
C)  10th day from the W-4 receipt date 
D)  first pay in the next quarter 
E)  first pay in the next year

Question 7

Which of the following forms is not completed by the employer?

Accepted Answer

A)  W-2 
B)  W-3 
C)  Form 941 
D)  W-4 
E)  Form 1099-MISC 
A)  W-2 
B)  W-3 
C)  Form 941 
D)  W-4 
E)  Form 1099-MISC

Question 8

For which of the following payments is the employer required to withhold federal income taxes?

Accepted Answer

A)  Advances made to sales personnel for traveling expenses 
B)  Tipped employee's monthly tips of $120 
C)  Deceased person's wages paid to the estate 
D)  Minister of Presbyterian church 
E)  All of the above 
A)  Advances made to sales personnel for traveling expenses 
B)  Tipped employee's monthly tips of $120 
C)  Deceased person's wages paid to the estate 
D)  Minister of Presbyterian church 
E)  All of the above

Question 9

Under the federal income tax withholding law, a definition of employee excludes partners.

Accepted Answer

A) True 
 B)False

Question 10

If an employee who left the company requests a W-2 before the end of the year, it must be furnished within 30 days of the request or the final wage payment (whichever is later).

Accepted Answer

A) True 
 B)False

Question 11

An employee filed a Form W-4 and claimed 22 withholding allowances. The employer should withhold 22% of the worker's gross earnings for federal income taxes until the form W-4 is approved by the IRS.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is false regarding an employee's contribution into a 401(k) tax deferred retirement account?

Accepted Answer

A)  Upon retirement, the employee will receive their contributions back in the form of regular payments. 
B)  The employee may be in a lower tax bracket when the retirement income is  taxed. 
C)  Upon retirement, payments are then subject to federal income tax. 
D)  The employee's contributions are not subject to FICA tax. 
E)  None of the above statements is correct. 
A)  Upon retirement, the employee will receive their contributions back in the form of regular payments. 
B)  The employee may be in a lower tax bracket when the retirement income is  taxed. 
C)  Upon retirement, payments are then subject to federal income tax. 
D)  The employee's contributions are not subject to FICA tax. 
E)  None of the above statements is correct.

Question 13

The number of withholding allowances claimed by an employee is set forth on Form W-2.

Accepted Answer

A) True 
 B)False

Question 14

Employees who regularly receive cash tips of $20 dollars or more in a calendar month are subject to federal income tax withholding on the tips

Accepted Answer

A) True 
 B)False

Question 15

A personal allowance:

Accepted Answer

A)  amounted to $2,000 in 20--. 
B)  may be claimed to reduce the amount of withholdings from the employee's earnings. 
C)  is indexed for inflation every calendar quarter. 
D)  may be claimed at the same time with each employer for whom an employee is working during the year. 
E)  for one person is a different amount for a single versus a married taxpayer. 
A)  amounted to $2,000 in 20--. 
B)  may be claimed to reduce the amount of withholdings from the employee's earnings. 
C)  is indexed for inflation every calendar quarter. 
D)  may be claimed at the same time with each employer for whom an employee is working during the year. 
E)  for one person is a different amount for a single versus a married taxpayer.

Question 16

Arch gives you an amended Form W-4 dated March 8, 20-- on which he claims two additional withholding allowances. He asks you to refund the excess taxes that were deducted from January 1 to March 8 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 8 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 8 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 17

Beech refuses to state her marital status on Form W-4 which she gave to you, the payroll manager, when she was hired. You should:

Accepted Answer

A)  tell Beech that it is OK since you know that she was recently divorced and is reluctant to talk about it. 
B)  inform Beech that she will have to write the IRS and give her reasons for refusing to state her marital status. 
C)  tell Beech that you will have to withhold income taxes as if she were married and had claimed one allowance. 
D)  tell Beech that you will have to withhold income taxes according to the withholding table for a single employee with no allowances. 
E)  advise Beech to write "It is no business of yours." in the margin of her Form W-4. 
A)  tell Beech that it is OK since you know that she was recently divorced and is reluctant to talk about it. 
B)  inform Beech that she will have to write the IRS and give her reasons for refusing to state her marital status. 
C)  tell Beech that you will have to withhold income taxes as if she were married and had claimed one allowance. 
D)  tell Beech that you will have to withhold income taxes according to the withholding table for a single employee with no allowances. 
E)  advise Beech to write "It is no business of yours." in the margin of her Form W-4.

Question 18

The withholding of federal income and FICA taxes from a tipped employee is made from the employee's wages that are under the employer's control.

Accepted Answer

A) True 
 B)False

Question 19

Wolf Company is giving a net bonus check of $500 to all of its employees. If each of the payments are subject to FIT (22% supplemental rate) and FICA taxes, but no state taxes, the gross amount of each bonus check would be

Accepted Answer

A)  $710.73 
B)  $663.75 
C)  $656.00 
D)  $662.75 
E)  none of these 
A)  $710.73 
B)  $663.75 
C)  $656.00 
D)  $662.75 
E)  none of these

Question 20

Both the percentage method and the wage-bracket method of withholding have each of the following characteristics except

Accepted Answer

A)  unmarried persons are distinguished from married persons 
B)  a table of allowances values is used 
C)  employees are given the full benefit of the allowances they claim 
D)  tables and wage-bracket charts are used to determine the amount withheld 
E)  the standard deduction is taken into account 
A)  unmarried persons are distinguished from married persons 
B)  a table of allowances values is used 
C)  employees are given the full benefit of the allowances they claim 
D)  tables and wage-bracket charts are used to determine the amount withheld 
E)  the standard deduction is taken into account

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

Cash tips of $20 dollars or more in a month must be reported to the employer by the tipped employee by the end of the following month.

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

Employee's payroll deductions into their 401(K) plans are generally made on a pretax basis and reduce the amount of gross pay that is subject to federal income tax withholding.

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

If an employee files an amended W-4, the employer must make the W-4 effective no later than the

Which of the following forms is not completed by the employer?

For which of the following payments is the employer required to withhold federal income taxes?

Under the federal income tax withholding law, a definition of employee excludes partners.

If an employee who left the company requests a W-2 before the end of the year, it must be furnished within 30 days of the request or the final wage payment (whichever is later).

An employee filed a Form W-4 and claimed 22 withholding allowances. The employer should withhold 22% of the worker's gross earnings for federal income taxes until the form W-4 is approved by the IRS.

Which of the following statements is false regarding an employee's contribution into a 401(k) tax deferred retirement account?

The number of withholding allowances claimed by an employee is set forth on Form W-2.

Employees who regularly receive cash tips of $20 dollars or more in a calendar month are subject to federal income tax withholding on the tips

A personal allowance:

Arch gives you an amended Form W-4 dated March 8, 20-- on which he claims two additional withholding allowances. He asks you to refund the excess taxes that were deducted from January 1 to March 8 when Arch claimed only one withholding allowance. You should:

Beech refuses to state her marital status on Form W-4 which she gave to you, the payroll manager, when she was hired. You should:

The withholding of federal income and FICA taxes from a tipped employee is made from the employee's wages that are under the employer's control.

Wolf Company is giving a net bonus check of $500 to all of its employees. If each of the payments are subject to FIT (22% supplemental rate) and FICA taxes, but no state taxes, the gross amount of each bonus check would be

Both the percentage method and the wage-bracket method of withholding have each of the following characteristics except

The Need for Payroll and Personnel Records

Computing Wages and Salaries

Social Security Taxes

Unemployment Compensation Taxes

Analyzing and Journalizing Payroll

Filters

Exam 4: Income Tax Withholding

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

Cash tips of $20 dollars or more in a month must be reported to the employer by the tipped employee by the end of the following month.

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

Employee's payroll deductions into their 401(K) plans are generally made on a pretax basis and reduce the amount of gross pay that is subject to federal income tax withholding.

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

If an employee files an amended W-4, the employer must make the W-4 effective no later than the

Which of the following forms is not completed by the employer?

For which of the following payments is the employer required to withhold federal income taxes?

Under the federal income tax withholding law, a definition of employee excludes partners.

If an employee who left the company requests a W-2 before the end of the year, it must be furnished within 30 days of the request or the final wage payment (whichever is later).

An employee filed a Form W-4 and claimed 22 withholding allowances. The employer should withhold 22% of the worker's gross earnings for federal income taxes until the form W-4 is approved by the IRS.

Which of the following statements is false regarding an employee's contribution into a 401(k) tax deferred retirement account?

The number of withholding allowances claimed by an employee is set forth on Form W-2.

Employees who regularly receive cash tips of $20 dollars or more in a calendar month are subject to federal income tax withholding on the tips

A personal allowance:

Arch gives you an amended Form W-4 dated March 8, 20-- on which he claims two additional withholding allowances. He asks you to refund the excess taxes that were deducted from January 1 to March 8 when Arch claimed only one withholding allowance. You should:

Beech refuses to state her marital status on Form W-4 which she gave to you, the payroll manager, when she was hired. You should:

The withholding of federal income and FICA taxes from a tipped employee is made from the employee's wages that are under the employer's control.

Wolf Company is giving a net bonus check of $500 to all of its employees. If each of the payments are subject to FIT (22% supplemental rate) and FICA taxes, but no state taxes, the gross amount of each bonus check would be

Both the percentage method and the wage-bracket method of withholding have each of the following characteristics except

The Need for Payroll and Personnel Records

Computing Wages and Salaries

Social Security Taxes

Unemployment Compensation Taxes

Analyzing and Journalizing Payroll

Filters