Exam 9: Payroll, Estimated Payments, and Retirement Plans

Ralph has a $130,000 IRA with Red Investments.For personal reasons, he decides to move his funds to Blue Investments.He requests that his funds be distributed to him on August 20, 2018. a.What amount will Ralph receive from Red Investment? b.What is the last day Ralph can deposit the funds from Red Investments and avoid taxation in the current year? c.If the funds were distributed from a qualified retirement plan (not an IRA), how much would Ralph receive? d.Assuming the funds were distributed from a qualified retirement plan, not an IRA, how much will Ralph have to contribute to Blue Investments to avoid taxable income and any penalties?

For 2018, the Social Security portion of the FICA tax is imposed at a rate of (not including any additional tax for high-income earners):

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

Ursula, an employee of Ficus Corporation, is 35 years old and plans to retire in 20 years.The corporation has a qualified retirement plan and contributes $2,000 during 2018 for Ursula.In 2018, how should Ursula treat the $2,000 contribution made on her behalf by the corporation?

Which of the following forms is used by an employer to report quarterly wages and federal payroll tax withholdings and deposits?

If an individual taxpayer's quarterly estimated tax payments equal or exceed 70 percent of the tax due for the current year, the taxpayer will not be subject to the penalty for underpayment of estimated tax.

Paul earns $55,000 during the current year.His employer contributes $3,000 during the year to a qualified retirement plan on behalf of Paul.The amount of the contribution for the year is based on Paul's desire to have a monthly retirement benefit of $3,500.What type of retirement plan is this?

Form 1099-DIV is an information return used to show the payment of:

Which of the following forms should be used by a company to report a payment of $1,500 to a computer consultant who is not an employee of the company?

Elwin worked at three jobs during 2018.He earned $30,000, $27,000, and $9,000, respectively, from the jobs.What amount can Elwin apply as a credit against his 2018 income tax liability for overpayment of FICA taxes?

Which of the following statements is true with regard to the reimbursement of employee business expenses?

Penny, age 52, takes a distribution of $30,000 from her Traditional IRA account.She plans to deposit it in an IRA with a different bank.Shortly after the distribution she drives her car through the front window of her credit union in a freak accident, and uses the funds to pay for the damages.What income and/or penalties related to the failure to rollover the IRA must she show on her tax return?

Marty earned $5,000 in interest income from the Honey Springs Bank.She failed to notify the bank that she was not subject to backup withholding.​ a.If Marty's taxable income puts her in the 25 percent bracket, how much would Honey Springs Bank withhold on the $5,000 of interest earnings? b.If Marty's taxable income puts her in the 15 percent bracket, how much would Honey Springs Bank withhold on the $5,000 of interest earnings?

The original copy of all Forms W-2 and Form W-3 must be filed with the Social Security Administration by January 31 of the year following the calendar year in which the wages were paid, regardless of the tax year of the employer.

Oliver has two employees who earned the following amounts during 2018: June \ 17,000 Eric \ 5,000 If Oliver timely pays 5.4 percent for state unemployment tax, what is the amount of his 2018 FUTA after the state tax credit?

Dividends paid to a shareholder by a corporation should be reported on which of the following forms?

Gordon is 60 years old and Mary is 55 years old.They are married with three dependent children over age 17, and Gordon has one job that pays wages of about $73,000.Assuming that Mary is unemployed, how many allowances should Gordon claim on his 2018 Form W-4, assuming no extra allowances for deductions or adjustments?

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

Elwin worked at three jobs during 2018.He earned $30,000, $27,000, and $9,000, respectively, from the jobs.What is the total amount of FICA tax that would have been withheld from Elwin's wages?

In 2018, the maximum amount of wages subject to the Social Security portion of the FICA tax is $128,400.