Exam 9: Payroll, Estimated Payments, and Retirement Plans

Mike is a single taxpayer.For the payroll period of November 2018, he is paid wages of $3,400, monthly.Mike claims three allowances on his Form W-4.​ a.Use the percentage method to calculate the amount of Mike's withholding for a monthly pay period. b.Use the withholding tables to determine the amount of Mike's withholding for the same period.

Individual quarterly estimated tax payments are filed with Form 1040-ES.

Employers must provide employees with their Form W-2 by February 15 of the year following the calendar year of payment of the wages.

Which of the following amounts paid by an employer to an employee is not subject to withholding?

The Pear Corporation pays its employees every 2 weeks.During the look-back period, in each pay period the total withholding and FICA tax (employees' and employer's share)amounted to $750.How often must the Pear Corporation deposit payroll taxes?

For 2018, Randy, an unmarried taxpayer, has wages of $45,000.He has a significant amount of income from dividends and interest and therefore expects to have a federal income tax liability of $18,000.His total federal income tax withholding for the year is $9,500.Randy had $100,000 of adjusted gross income and a federal tax liability of $11,000 on his 2017 return.To avoid a penalty for underpayment of estimated taxes, what is the minimum amount of total estimated tax that Randy must pay in 2018? Assume the payments are made on a timely basis.

If an individual taxpayer discovers that his or her original estimate for estimated tax payments was inaccurate, the taxpayer should continue to make payments based on the original estimate and pay any additional amount or request any refund when the tax return is filed.

Taxpayers with large amounts of deductions may claim extra withholding allowances on their Form W-4s.

Sally is an employer with one employee, Sara.Sara earned $12,000 from January 1, 2018 through June 30, 2018, and the state unemployment tax rate is 5.4 percent.Calculate the following amount for Sally. a.FUTA tax after the state tax credit b.What form should Sally use to report her FUTA tax liability for 2018?

In 2018, Lew, who is single, earned wages of $386,724. a.What is the amount of Social Security tax withheld from his salary? b.What is the amount of Medicare tax (including additional 0.9% tax if any) withheld from his salary?

The two most common methods of determining federal income tax withholding are the percentage method and the wage bracket method.

George has four employees who earned $75,000, $27,000, $2,100, and $6,200 during 2018, respectively.He paid 5.4 percent for state unemployment tax.How much FUTA tax will George owe for the four employees?

Mark the incorrect answer.Estimated income tax payments:

Gambling winnings must be reported to the IRS, but withholding of taxes on winnings is never required.

Mary is self-employed for 2019.Mary estimates her required annual estimated tax payment for 2019 to be $4,000.Mary had a $500 overpayment of last year's taxes which she will apply against her first quarter estimated payment.​ a.How much should Mary pay with her first quarter estimated tax voucher? b.When is the payment due?