Exam 9: Withholding Estimated Payments and Payroll Taxes

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.

The FUTA tax is a voluntary unemployment tax which an employer may or may not wish to contribute towards.

Peter and Joan are married and Joan has self-employment income of $240,000.Peter is retired.How much additional 0.9% Medicare tax will Peter and Joan owe with their 2017 income tax return? ​

For purposes of the additional 0.9% Medicare tax on earned income,a single taxpayer having earned income of more than $200,000 is generally subject to the tax.

Mark the correct answer.FICA taxes are:

For 2017,the Social Security portion of the FICA tax is imposed at a rate of:

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

For 2017,the maximum base amount for computing the Medicare portion of the self-employment tax is $150,000.

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

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.

Mary is self-employed for 2018.Mary estimates her required annual estimated tax payment for 2018 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?

For 2017,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 2016 return.To avoid a penalty for underpayment of estimated taxes,what is the minimum amount of total estimated tax that Randy must pay in 2017? Assume the payments are made on a timely basis.

Household employers are not required to pay FICA taxes on part-time household employees.

Elwin worked at three jobs during 2017.He earned $30,000,$27,000,and $9,000,respectively,from the jobs.What amount can Elwin apply as a credit against his 2017 income tax liability for overpayment of FICA taxes?

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

Mark has two jobs during 2017.One employer withheld and paid FICA taxes on $80,200 of Mark's salary and the other employer withheld and paid FICA taxes on $52,800 in salary paid to Mark.Calculate the amount of Mark's credit for the overpayment of Social Security taxes that he should claim on his 2017 Form 1040.

Mark the incorrect answer.Estimated income tax payments:

The FUTA tax for 2017 is based on 6.2 percent of each employee's wages up to $10,000.

Oliver has two employees who earned the following amounts during 2017: If Oliver timely pays 5.4 percent for state unemployment tax,what is the amount of his 2017 FUTA after the state tax credit?

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?