Exam 9: Withholding Estimated Payments and Payroll Taxes

Sally is an employer with one employee, Sara. Sara earned $12,000 from January 1, 2016 through June 30, 2016, 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 2016?

Which one of the following forms must an employer provide to his employee by January 31 of the following year?

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. Assuming that Mary is unemployed, how many allowances should Gordon claim on his Form W-4, assuming no extra allowances for deductions or adjustments?

Payors are not required to use backup withholding if:

When taxpayers overpay Social Security taxes, the excess taxes may be claimed as a credit against their income tax liability.

Elwin worked at three jobs during 2016. 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?

An employee is reimbursed for travel and other ordinary and necessary expenses. Under what circumstances would income tax be withheld from the employee on these amounts?

The Wash Your Paws Self-Service Dog Wash, a California business, had two employees during the year. Lindsey worked from January through March 15 and earned $2,750. Avery worked for the whole year and earned $20,000. The State of California assesses unemployment tax at the rate of 5.4 percent. Calculate the total FUTA tax after the credit for the state unemployment tax.

If an employee does not complete a Form W-4, the employer must withhold tax as if the employee were single with no exemptions.

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

In determining an employee's FICA tax to be withheld, the maximum amount of wages subject to FICA must be reduced by the taxpayer's self-employment earnings.

Karen is single with no dependents and earns $18,000 a year. She gives her employer a Form W-4 on which she claims 17 allowances. What is her employer required to do about the Form W-4? Explain.

Melody and Todd are married and have employee wages of $250,000 each in 2016. They have no other income. How much additional 0.9% Medicare surtax will Melody and Todd have to pay or receive as a refund when they file their 2016 income tax return? ​

In 2016, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The third employee worked only part-time and earned $4,000. The employer timely paid state unemployment tax equal to 5.4 percent of each employee's wages up to $7,000. How much FUTA tax is due from Willow Corporation for 2016, after the credit for state unemployment taxes?

A credit against the FUTA tax is available for state unemployment tax paid by the employer.

The original copy of all Forms W-2 and Form W-3 must be filed with the Social Security Administration by February 28 of the year following the calendar year in which the wages were paid, regardless of the tax year of the employer.

In 2016, Willow Corporation had three employees. Two of the employees worked full-time and earned salaries of $25,000 each. The third employee worked only part-time and earned $4,000. The employer timely paid state unemployment tax equal to 5.4 percent of each employee's wages up to $7,000. How much unemployment tax was paid to the state from Willow Corporation for 2016?

Dividend income is not subject to the self-employment tax.

Elwin worked at three jobs during 2016. He earned $30,000, $27,000, and $9,000, respectively, from the jobs. What amount can Elwin apply as a credit against his 2016 income tax liability for overpayment of FICA taxes?

For 2016, the maximum base for the Social Security portion of the FICA tax is: