Question 1

On August 5, 20--, Hunt filed an amended Form W-4 to show a decrease in the number of allowances claimed. Hunt's employer must put the new withholding allowance certificate into effect before the next weekly payday on August 9.

Accepted Answer

A) True 
 B)False

Question 2

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...

Question 3

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 401(k) 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...

Question 4

Before any federal income taxes may be withheld, there must be, or must have been, an employer-employee relationship.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Vacation pay is to be paid at the same time as a regular wage payment. In this case, the vacation pay must be combined with the regular wage payment and federal income taxes calculated on the amount of the total payment.

Accepted Answer

A) True 
 B)False

Question 7

Ron Case, married with four dependents, failed to complete and file Form W-4 with his employer. The employer should

Accepted Answer

A)  withhold federal income taxes as if Case were single and claimed six allowances 
B)  withhold federal income taxes as if Case were married and claimed no allowances 
C)  withhold federal income taxes at a rate of 22% of Case's wages 
D)  refuse to pay Case until his Form W-4 is filed 
E)  take none of the above actions

Question 8

Form W-3 is filed with the Social Security Administration by employers as a transmittal of the information contained on Forms W-2.

Accepted Answer

A) True 
 B)False

Question 9

Not-for-profit corporations that are exempt from federal income taxes do not withhold federal income taxes from their employee's pay.

Accepted Answer

A) True 
 B)False

Question 10

The Wage and Tax Statement must be furnished to an employee on or before February 28 following the close of the calendar year.

Accepted Answer

A) True 
 B)False

Question 11

A worker with three employers should always claim at least one withholding allowance with each employer.

Accepted Answer

A) True 
 B)False

Question 12

By completing Form W-4P, a person can elect to have no income tax withheld from the annuity amounts the person receives.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Withholding allowance certificates must be retained by employers for as long as the certificates are in effect and for four years thereafter.

Accepted Answer

A) True 
 B)False

Question 15

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...

Question 16

Which of the following fringe benefits is taxable?

Accepted Answer

A)  membership in a country club 
B)  use of on-premise athletic facility 
C)  job-placement assistance 
D)  qualified employee discounts 
E)  reduced tuition for education

Question 17

An employer must file an information return under all of the following conditions except :

Accepted Answer

A)  to report $1,000 of compensation paid to an individual who is not an employee. 
B)  to report the wages totaling $600 paid to an independent contractor during the calendar year. 
C)  to report dividends totaling $600 paid to an individual during the calendar year. 
D)  to report commissions of $500 paid to a self-employed salesman. 
E)  An information return must be filed under each of the above conditions.

Question 18

Gere became the father of triplets on May 21, 20--. He must file an amended Form W-4 on or before May 31.

Accepted Answer

A) True 
 B)False

Question 19

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 20

There is no limit to the amount that an employer can contribute in an employee's SIMPLE retirement account.

Accepted Answer

A) True 
 B)False

Exam 4: Income Tax Withholding

On August 5, 20--, Hunt filed an amended Form W-4 to show a decrease in the number of allowances claimed. Hunt's employer must put the new withholding allowance certificate into effect before the next weekly payday on August 9.

Before any federal income taxes may be withheld, there must be, or must have been, an employer-employee relationship.

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.

Vacation pay is to be paid at the same time as a regular wage payment. In this case, the vacation pay must be combined with the regular wage payment and federal income taxes calculated on the amount of the total payment.

Ron Case, married with four dependents, failed to complete and file Form W-4 with his employer. The employer should

Form W-3 is filed with the Social Security Administration by employers as a transmittal of the information contained on Forms W-2.

Not-for-profit corporations that are exempt from federal income taxes do not withhold federal income taxes from their employee's pay.

The Wage and Tax Statement must be furnished to an employee on or before February 28 following the close of the calendar year.

A worker with three employers should always claim at least one withholding allowance with each employer.

By completing Form W-4P, a person can elect to have no income tax withheld from the annuity amounts the person receives.

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

Withholding allowance certificates must be retained by employers for as long as the certificates are in effect and for four years thereafter.

Which of the following fringe benefits is taxable?

An employer must file an information return under all of the following conditions except :

Gere became the father of triplets on May 21, 20--. He must file an amended Form W-4 on or before May 31.

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:

There is no limit to the amount that an employer can contribute in an employee's SIMPLE retirement account.