Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

A nondeductible penalty is imposed on underpayments of estimated taxes.

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

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

Accepted Answer

A) Distributions from a partnership. 
B) Interest. 
C) Dividends. 
D) Unemployment compensation. 
E) None of the above.

Question 5

In 2013,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 $3,000.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 2013?

Accepted Answer

A) $136 
B) $168 
C) $918 
D) $1,134 
E) None of the above

Question 6

Steve is a single man who lives by himself.He has one job as a computer tech.How many withholding allowances can he claim?

Accepted Answer

A) 5 
B) 10 
C) 3 
D) 2 
E) He can claim any of the above withholding allowances that he believes will leave him with proper withholding

Question 7

Mark the incorrect answer.In completing W-4s,employees may claim extra allowances:

Accepted Answer

A) If they are paying alimony. 
B) If they have tax credits. 
C) If they expect to have large amounts of itemized deductions. 
D) If they have high levels of interest and dividend income.

Question 8

The FUTA tax is paid by:

Accepted Answer

A) Employees only. 
B) Employers only. 
C) Employers and employees. 
D) Neither employers nor employees. 
E) The federal government.

Question 9

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.

Question 10

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.

Accepted Answer

The answer of Karen is single with no dependents and...

Question 11

Employer deposits of withheld taxes may be made to any bank.

Accepted Answer

A) True 
 B)False

Question 12

For 2013,the Social Security portion of the FICA tax is imposed at a rate of:

Accepted Answer

A) 6.2 percent for the employee and 7.65 percent for the employer. 
B) 6.2 percent for only the employer. 
C) 6.2 percent for only the employee. 
D) 6.2 percent for the employee and 6.2 percent for the employer. 
E) None of the above.

Question 13

Reimbursements of moving expenses are always subject to withholding.

Accepted Answer

A) True 
 B)False

Question 14

What is the purpose of backup withholding?

Accepted Answer

The answer of What is the purpose of backup withholding?...

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Mark the correct answer.FICA taxes are:

Accepted Answer

A) 7.65 percent of all earned income with no limitations. 
B) 7.65 percent of earned income up to $150,000. 
C) Paid by the employee and by the employer. 
D) Not subject to cost of living adjustments each year.

Question 17

In 2013,Lew earned wages of $384,828.
a.What is the amount of Social Security tax withheld from his salary?
b.What is the amount of Medicare tax withheld from his salary?

Accepted Answer

The answer of In 2013,Lew earned wages of $384,828.
a.What is...

Question 18

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 19

In 2013,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 $3,000.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 2013,after the credit for state unemployment taxes?

Accepted Answer

A) $0 
B) $102 
C) $168 
D) $918 
E) None of the above

Question 20

Richard is employed by a major defense contractor and earns $156,000 in 2013.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

The answer of Richard is employed by a major defense...

Exam 9: Withholding, Estimated Payments, and Payroll Taxes

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

A nondeductible penalty is imposed on underpayments of estimated taxes.

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

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

Steve is a single man who lives by himself.He has one job as a computer tech.How many withholding allowances can he claim?

Mark the incorrect answer.In completing W-4s,employees may claim extra allowances:

The FUTA tax is paid by:

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

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.

Employer deposits of withheld taxes may be made to any bank.

For 2013,the Social Security portion of the FICA tax is imposed at a rate of:

Reimbursements of moving expenses are always subject to withholding.

What is the purpose of backup withholding?

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

Mark the correct answer.FICA taxes are:

In 2013,Lew earned wages of $384,828. a.What is the amount of Social Security tax withheld from his salary? b.What is the amount of Medicare tax withheld from his salary?

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.

Richard is employed by a major defense contractor and earns $156,000 in 2013.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