Question 1

Which of the following statements about the FICA tax is not true?

Accepted Answer

A) The FICA tax is composed of two parts,Social Security and Medicare. 
B) Self-employed individuals may elect to pay either FICA taxes or self-employment taxes. 
C) FICA taxes are paid by both the employees and their employers. 
D) The income amount subject to the Social Security portion of FICA tax has increased significantly over the years. 
E) Wages subject to FICA tax that are received by a self-employed individual reduce the individual's maximum Social Security tax base. 
A) The FICA tax is composed of two parts,Social Security and Medicare. 
B) Self-employed individuals may elect to pay either FICA taxes or self-employment taxes. 
C) FICA taxes are paid by both the employees and their employers. 
D) The income amount subject to the Social Security portion of FICA tax has increased significantly over the years. 
E) Wages subject to FICA tax that are received by a self-employed individual reduce the individual's maximum Social Security tax base.

Question 2

An individual who expects to receive more than $500 of income from sources other than wages meets the requirements for having to file quarterly estimated tax payments.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following types of income is subject to the self-employment tax?

Accepted Answer

A) Interest income 
B) Gain on sale of real estate 
C) Income from a sole proprietor's law practice 
D) Dividends from stock 
E) None of the above 
A) Interest income 
B) Gain on sale of real estate 
C) Income from a sole proprietor's law practice 
D) Dividends from stock 
E) None of the above

Question 4

Ellen uses the head of household filing status and has a dependent daughter.Ellen has self-employment income of $310,000 as an architect and $10,000 of self-employment losses from a jewelry making business.
a.What is Ellen's 0.9% additional Medicare tax for 2017?
b.Is Ellen allowed to include a portion of the 0.9% additional Medicare tax in computing the deduction for self-employment taxes reported as an adjustment for AGI on the front page of her income tax return?

Accepted Answer

a.$900 = ($310,000 -

Question 5

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

Accepted Answer

A) A car mechanic who is self-employed and earns $50,000 a year. 
B) A wealthy individual whose earnings are from corporate dividends. 
C) An employee who works at a local department store with appropriate withholding and no other income. 
D) All of the above must make estimated payments. 
A) A car mechanic who is self-employed and earns $50,000 a year. 
B) A wealthy individual whose earnings are from corporate dividends. 
C) An employee who works at a local department store with appropriate withholding and no other income. 
D) All of the above must make estimated payments.

Question 6

What is the purpose of backup withholding?

Accepted Answer

The purpose is to ensure income tax is p

Question 7

Payors are not required to use backup withholding if:

Accepted Answer

A) The taxpayer did not give the payor his or her taxpayer identification number. 
B) The taxpayer certifies that he or she is not subject to backup withholding. 
C) The IRS informs the payor that the taxpayer gave an incorrect identification number. 
D) The IRS informs the payor to start withholding because the taxpayer has not reported the income on his or her tax return. 
A) The taxpayer did not give the payor his or her taxpayer identification number. 
B) The taxpayer certifies that he or she is not subject to backup withholding. 
C) The IRS informs the payor that the taxpayer gave an incorrect identification number. 
D) The IRS informs the payor to start withholding because the taxpayer has not reported the income on his or her tax return.

Question 8

Which one of the following payroll tax deposit schedules is not a rule that applies for a class of employers?

Accepted Answer

A) One-day deposit rule 
B) Eight-day deposit rule 
C) Semi-weekly deposit rule 
D) Monthly deposit rule 
E) Yearly deposit rule 
A) One-day deposit rule 
B) Eight-day deposit rule 
C) Semi-weekly deposit rule 
D) Monthly deposit rule 
E) Yearly deposit rule

Question 9

Richard is employed by a major defense contractor and earns $156,000 in 2017.Calculate:
a.The amount of Social Security tax withheld from his income
b.The amount of Medicare tax withheld from his income
c.The amount of FUTA withheld from his income

Accepted Answer

a.$127,200 maximum times 6.2%

Question 10

Lucinda is a self-employed veterinarian in 2017.Her Schedule C net earnings are $86,000 for the year.Calculate the total amount of Lucinda's self-employment tax liability for 2017.

Accepted Answer

$12,151.41

Question 11

George has four employees who earned $75,000,$27,000,$2,100,and $6,200 during 2017,respectively.He paid 5.4 percent for state unemployment tax.How much FUTA tax will George owe for the four employees?

Accepted Answer

A) $133.80 
B) $882.40 
C) $321.60 
D) $224.00 
E) $163.70 
A) $133.80 
B) $882.40 
C) $321.60 
D) $224.00 
E) $163.70

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) W-3 
B) W-2 
C) W-4 
D) 941 
E) 1040 
A) W-3 
B) W-2 
C) W-4 
D) 941 
E) 1040

Question 14

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.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) Form 940 
B) Form 941 
C) Form 1099 
D) Form W-2 
E) None of the above 
A) Form 940 
B) Form 941 
C) Form 1099 
D) Form W-2 
E) None of the above

Question 16

A nondeductible penalty may be imposed on underpayments of estimated taxes.

Accepted Answer

A) True 
 B)False

Question 17

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.

Accepted Answer

A) True 
 B)False

Question 18

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations.In which situation would this not be required?

Accepted Answer

A) A nanny who earns $22,000 a year 
B) A baby-sitter who earns $1,300 a year 
C) A cook who is paid $35,000 a year 
D) A cleaning lady who is paid $8,000 a year 
E) The taxpayer would not have to pay Social Security and Medicare taxes in any of the above situations 
A) A nanny who earns $22,000 a year 
B) A baby-sitter who earns $1,300 a year 
C) A cook who is paid $35,000 a year 
D) A cleaning lady who is paid $8,000 a year 
E) The taxpayer would not have to pay Social Security and Medicare taxes in any of the above situations

Question 19

Sally is an employer with one employee,Sara.Sara earned $12,000 from January 1,2017 through June 30,2017,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 2017?

Accepted Answer

The answer of Sally is an employer with one employee,Sara.Sara...

Question 20

In 2017,Lew 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?

Accepted Answer

a.Social Security maximum of $

Which of the following statements about the FICA tax is not true?

An individual who expects to receive more than $500 of income from sources other than wages meets the requirements for having to file quarterly estimated tax payments.

Which of the following types of income is subject to the self-employment tax?

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

What is the purpose of backup withholding?

Payors are not required to use backup withholding if:

Which one of the following payroll tax deposit schedules is not a rule that applies for a class of employers?

Richard is employed by a major defense contractor and earns $156,000 in 2017.Calculate: a.The amount of Social Security tax withheld from his income b.The amount of Medicare tax withheld from his income c.The amount of FUTA withheld from his income

Lucinda is a self-employed veterinarian in 2017.Her Schedule C net earnings are $86,000 for the year.Calculate the total amount of Lucinda's self-employment tax liability for 2017.

George has four employees who earned $75,000,$27,000,$2,100,and $6,200 during 2017,respectively.He paid 5.4 percent for state unemployment tax.How much FUTA tax will George owe for the four employees?

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

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

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.

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

A nondeductible penalty may be imposed on underpayments of estimated taxes.

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.

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations.In which situation would this not be required?

In 2017,Lew 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 Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 9: Withholding Estimated Payments and Payroll Taxes

Which of the following statements about the FICA tax is not true?

An individual who expects to receive more than $500 of income from sources other than wages meets the requirements for having to file quarterly estimated tax payments.

Which of the following types of income is subject to the self-employment tax?

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

What is the purpose of backup withholding?

Payors are not required to use backup withholding if:

Which one of the following payroll tax deposit schedules is not a rule that applies for a class of employers?

Richard is employed by a major defense contractor and earns $156,000 in 2017.Calculate: a.The amount of Social Security tax withheld from his income b.The amount of Medicare tax withheld from his income c.The amount of FUTA withheld from his income

Lucinda is a self-employed veterinarian in 2017.Her Schedule C net earnings are $86,000 for the year.Calculate the total amount of Lucinda's self-employment tax liability for 2017.

George has four employees who earned $75,000,$27,000,$2,100,and $6,200 during 2017,respectively.He paid 5.4 percent for state unemployment tax.How much FUTA tax will George owe for the four employees?

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

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

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.

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

A nondeductible penalty may be imposed on underpayments of estimated taxes.

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.

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations.In which situation would this not be required?

In 2017,Lew 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 Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters