Question 1

The IRA format of the SIMPLE plan allows employees to make tax-free contributions of up to $13,000

Accepted Answer

A) True 
 B)False

Question 2

Persons eligible for deductible IRA contributions may put aside a specified amount of their compensation without paying federal income taxes on that amount.

Accepted Answer

A) True 
 B)False

Question 3

If you, an employer, are filing 550 Forms W-2, you must use electronic filing rather than paper Forms W-2.

Accepted Answer

A) True 
 B)False

Question 4

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 5

Complete the following payroll register for employees of Corby Company for the week ended March 1, 20--. Taxable earnings should be computed on the basis of a 40-hour week with overtime earnings being paid at time and one-half for all hours over 40 each workweek (no overtime for salaried employees). 
Note:   Carry each overtime hourly rate out to 3 decimal places and then round off to 2 decimal places. 
All employees' wages are subject to the OASDI tax of 6.2% and the HI tax of 1.45%.  The supplemental HI rate of 0.9% is not applicable. 
Use the partial wage-bracket tables provided to determine the amount of federal income tax to be withheld. For the salaried employees (#32 and #10), use the percentage method table. 
All workers are employed in a state that imposes a 2% income tax on the gross wages earned by each worker.   
   Amount of One Withholding Allowance Weekly $80.80 
           Percentage Method Tables for Income Tax Withholding  
Source: Internal Revenue Service

Accepted Answer

The answer of Complete the following payroll register for employees...

Question 6

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 7

In the case of a 401(k) plan, employees age 50 or over can shelter an extra $10,000 of their wages from federal income tax.

Accepted Answer

A) True 
 B)False

Question 8

To correct errors on previously filed Forms W-2, an employer must file Form W-3.

Accepted Answer

A) True 
 B)False

Exam 4: Income Tax Withholding

The IRA format of the SIMPLE plan allows employees to make tax-free contributions of up to $13,000

Persons eligible for deductible IRA contributions may put aside a specified amount of their compensation without paying federal income taxes on that amount.

If you, an employer, are filing 550 Forms W-2, you must use electronic filing rather than paper Forms W-2.

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

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.

In the case of a 401(k) plan, employees age 50 or over can shelter an extra $10,000 of their wages from federal income tax.

To correct errors on previously filed Forms W-2, an employer must file Form W-3.