Question 1

Under the federal income tax withholding law, which of the following is not defined as an employee?

Accepted Answer

A) Partner who draws compensation for services rendered the partnership 
B) General manager, age 66 
C) Payroll clerk hired one week ago 
D) Governor of the state of Florida 
E) Secretary employed by a not-for-profit corporation

Question 2

A personal allowance:

Accepted Answer

A) amounted to $2,000 in 2019. 
B) may be claimed to reduce the amount of withholdings from the employee's earnings. 
C) is indexed for inflation every calendar quarter. 
D) may be claimed at the same time with each employer for whom an employee is working during the year. 
E) for one person is a different amount for a single versus a married taxpayer.

Question 3

To curb the practice of employees filing false Forms W-4, the IRS requires that an employer submit to the agency a copy of each Form W-4:

Accepted Answer

A) the IRS has requested in writing. 
B) on which an employee, usually earning $180 each week at the time Form W-4 was filed, now claims to be exempt from withholding. 
C) on which an employee claims to be single but has 9 withholding allowances. 
D) on which a married employee claims no withholding allowances. 
E) on which a recently divorced employee claims 5 withholding allowances and authorizes an additional $10 to be withheld each week.

Question 4

All of the following are properly defined as wages subject to the withholding of federal income taxes except:

Accepted Answer

A) a year-end bonus. 
B) kitchen appliances given by manufacturer in lieu of cash wages. 
C) dismissal payment. 
D) vacation pay. 
E) payments made under workers' compensation law.

Question 5

Exhibit 4-1:
Use the following tables to calculate your answers.   
-Refer to Exhibit 4-1.Mary Matthews made $950 during a biweekly pay period only social security fully taxable) and federal income taxes attach to her pay.Matthews contributes $100 each biweekly pay to her company's 401k.Determine Matthews take home pay if she is married and claims 2 allowances.Use Wage Bracket Method)

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 6

The payments to a cook employed by a college fraternity are excluded from federal income tax withholding.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following noncash fringe benefits does not represent taxable income subject to federal income tax withholding?

Accepted Answer

A) Flight on employer-provided airline 
B) Personal use of company car 
C) Sick pay 
D) Employer-paid membership to a country club 
E) All of the above are taxable.

Question 8

A company must withhold federal income taxes from payments made to independent contractors in which of the following cases?

Accepted Answer

A) When there is a signed contract between the parties. 
B) When the contractor is paid $400. 
C) When the contractor is a corporation. 
D) When the contractor has not provided a taxpayer identification number and the contract is $600 or more. 
E) All of the above.

Question 9

A waiter receives cash tips amounting to $120 in a month.The waiter must report the amount of the cash tips to the employer by the 10th of the month following the month they receive the tips.

Accepted Answer

A) True 
 B)False

Question 10

Evers, who works for two employers, is entitled to three personal allowances.Evers must claim the three allowances with each of the two employers during the entire calendar year.

Accepted Answer

A) True 
 B)False

Question 11

Exhibit 4-1:
Use the following tables to calculate your answers.   
-Refer to Exhibit 4-1.Carson Smart is paid $1,200 every two weeks plus a taxable lodging allowance of $100.He is a participant in the company 401k) plan and has $150 deducted from his pay for his contribution to the plan.He is married with two allowances.How much would be deducted from his pay for federal income tax using the wage- bracket table)?

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 12

Cash tips of $20 or more received by a tipped employee in a calendar month are treated as remuneration subject to federal income tax withholding.

Accepted Answer

A) True 
 B)False

Question 13

Under the federal income tax withholding law, income taxes are not withheld from the value of meals that employers furnish workers on the employers' premises for the employers' convenience.

Accepted Answer

A) True 
 B)False

Question 14

Exhibit 4-1:
Use the following tables to calculate your answers.   
-Refer to Exhibit 4-1.Determine the income tax to withhold from the biweekly wages of the following employees wage-bracket):

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 15

A person holding two jobs may have additional income tax withheld by increasing the number of withholding allowances claimed.

Accepted Answer

A) True 
 B)False

Question 16

Exhibit 4-1:
Use the following tables to calculate your answers.   
-Refer to Exhibit 4-1.Edward Dorsey is a part-time employee, and during the biweekly pay period he earned $395.In addition, he is being paid a bonus of $300 along with his regular pay.If Dorsey is single and claims two withholding allowances, how much would be deducted from his pay for FIT? There are two ways to determine his deduction- do not use table for percentage method.)

Accepted Answer

The answer of Exhibit 4-1:
Use the following tables to calculate...

Question 17

For state income tax purposes, all states treat 401k) plan payroll deductions as nontaxable.

Accepted Answer

A) True 
 B)False

Question 18

An employer is required to submit a copy of the employee's Form W-4 to the IRS if the employee has claimed 15 or more withholding allowances.

Accepted Answer

A) True 
 B)False

Question 19

Arch gives you an amended Form W-4 dated March 8, 2019 on which he claims two additional withholding allowances.He asks you to refund the excess taxes that were deducted from January 1 to March 8 when Arch claimed only one withholding allowance.You should:

Accepted Answer

A) repay the overwithheld taxes on Arch's next payday. 
B) tell Arch that you will spread out a refund of the overwithheld taxes equally over the next six pays. 
C) inform Arch that you are unable to repay the overwithheld taxes that were withheld before March 8 and that the adjustment will have to be made when he files his annual income tax return. 
D) tell Arch to write the IRS immediately and ask for a refund of the overwithheld taxes. 
E) inform Arch that you will appoint a committee to study his request.

Question 20

The standard deduction varies according to whether the wage-bracket method or the percentage method is used.

Accepted Answer

A) True 
 B)False

Exam 4: Income Tax Withholding

Under the federal income tax withholding law, which of the following is not defined as an employee?

A personal allowance:

To curb the practice of employees filing false Forms W-4, the IRS requires that an employer submit to the agency a copy of each Form W-4:

All of the following are properly defined as wages subject to the withholding of federal income taxes except:

The payments to a cook employed by a college fraternity are excluded from federal income tax withholding.

Which of the following noncash fringe benefits does not represent taxable income subject to federal income tax withholding?

A company must withhold federal income taxes from payments made to independent contractors in which of the following cases?

A waiter receives cash tips amounting to $120 in a month.The waiter must report the amount of the cash tips to the employer by the 10th of the month following the month they receive the tips.

Evers, who works for two employers, is entitled to three personal allowances.Evers must claim the three allowances with each of the two employers during the entire calendar year.

Cash tips of $20 or more received by a tipped employee in a calendar month are treated as remuneration subject to federal income tax withholding.

Under the federal income tax withholding law, income taxes are not withheld from the value of meals that employers furnish workers on the employers' premises for the employers' convenience.

Exhibit 4-1: Use the following tables to calculate your answers. -Refer to Exhibit 4-1.Determine the income tax to withhold from the biweekly wages of the following employees wage-bracket):

A person holding two jobs may have additional income tax withheld by increasing the number of withholding allowances claimed.

For state income tax purposes, all states treat 401k) plan payroll deductions as nontaxable.

An employer is required to submit a copy of the employee's Form W-4 to the IRS if the employee has claimed 15 or more withholding allowances.

Arch gives you an amended Form W-4 dated March 8, 2019 on which he claims two additional withholding allowances.He asks you to refund the excess taxes that were deducted from January 1 to March 8 when Arch claimed only one withholding allowance.You should:

The standard deduction varies according to whether the wage-bracket method or the percentage method is used.