Question 1

Instruction 5-1 
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. 
Refer to Instruction 5-1 . Aaron Norman earned $24,900 for the year from Marcus Company. The company is subject to a SUTA tax of 4.7% on the first $9,900 of earnings. Determine:

Accepted Answer

The answer of Instruction 5-1 
Use the net FUTA tax...

Question 2

An employer can use a credit card to pay the quarterly deposit of FUTA taxes during the year.

Accepted Answer

A) True 
 B)False

Question 3

Employers have to pay a FUTA tax on only the first $3,500 of each part-time employee's earnings (1/2 of the full $7,000 limit).

Accepted Answer

A) True 
 B)False

Question 4

The person who is not an authorized signer of Form 940 is:

Accepted Answer

A)  the individual, if a sole proprietorship. 
B)  the accountant from the company's independent auditing firm. 
C)  the president, if a corporation. 
D)  a fiduciary, if a trust. 
E)  All of the above are authorized signers.

Question 5

For FUTA purposes, an employer must pay a higher FUTA tax rate on executives than on nonsupervisory personnel.

Accepted Answer

A) True 
 B)False

Question 6

If an employee has more than one employer during the current year, the taxable wage base applies separately to each of those employers, unless one employer has transferred the business to the second.

Accepted Answer

A) True 
 B)False

Question 7

FUTA tax deposits cannot be paid electronically.

Accepted Answer

A) True 
 B)False

Question 8

Instruction 5-1 
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. 
a.  Complete Part 2 of Form 940 based on the following information:   b. Complete Part 5 of Form 940 for the employer given the breakdown of FUTA taxable

Accepted Answer

The answer of Instruction 5-1 
Use the net FUTA tax...

Question 9

A federal unemployment tax is levied on:

Accepted Answer

A)  employees only. 
B)  both employers and employees. 
C)  employers only. 
D)  government employers only. 
E)  no one.

Question 10

For FUTA purposes, an employer can be any one of the following except :

Accepted Answer

A)  an individual. 
B)  a partnership. 
C)  a trust. 
D)  a corporation. 
E)  All of the above can be employers.

Question 11

Currently, none of the states imposes an unemployment tax on employees.

Accepted Answer

A) True 
 B)False

Question 12

If an employer pays unemployment taxes to two states, it will have the same SUTA tax rate in both states.

Accepted Answer

A) True 
 B)False

Question 13

All of the states allow employers to make voluntary contributions into their state unemployment fund so that a lower tax contribution rate would be assigned.

Accepted Answer

A) True 
 B)False

Question 14

Instruction 5-1 
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. 
Refer to Instruction 5-1 . Sparks Company's SUTA rate for next year is 3.25% because its reserve ratio falls into the state's 10% to less than 12% category [(contributions - benefits paid) ÷ average payroll = $414,867 ÷ $3,521,790 = 11.78%]. If the next bracket (12% to less than 14%) would give the company a lower tax rate of 3.05%, what would be the least amount of the voluntary contribution needed to qualify the company for the 3.05% SUTA tax rate?

Accepted Answer

The answer of Instruction 5-1 
Use the net FUTA tax...

Question 15

Fred Stone is an employee of Henrock Company. During the first part of the year, Stone earned $4,340 while working in State Q. For the remainder of the year, the company transferred him to State S where he earned $27,000. Henrock Company's tax rate in State Q is 4.6%, and in State S, 4.0% on the first $7,000. If reciprocal arrangements exist between the two states, determine the SUTA tax that the company paid on Stone's earnings in State S.

Accepted Answer

The answer of Fred Stone is an employee of Henrock...

Question 16

Unlike Form 941, there is no penalty for the late filing of Form 940.

Accepted Answer

A) True 
 B)False

Question 17

The mailing of Form 940 is considered timely if it is postmarked on or before the due date.

Accepted Answer

A) True 
 B)False

Question 18

Instruction 5-1 
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. 
Refer to Instruction 5-1 . John Gercke is an employee of The Woolson Company. During the first part of the year, he earned $6,800 while working in State A. For the remainder of the year, the company transferred him to State B where he earned $16,500. The Woolson Company's tax rate in State A is 4.2%, and in State B it is 3.15% on the first $7,000. Assuming that reciprocal arrangements exist between the two states, determine the SUTA tax that the company paid to:

Accepted Answer

The answer of Instruction 5-1 
Use the net FUTA tax...

Question 19

If the employer has made timely deposits that pay the FUTA tax liability in full, the filing of Form 940 can be delayed until:

Accepted Answer

A)  December 31. 
B)  February 15. 
C)  February 10. 
D)  February 1. 
E)  March 31.

Question 20

When making a payment of FUTA taxes, the employer must make the payment by the:

Accepted Answer

A)  end of the month after the quarter. 
B)  15th of the month after the quarter. 
C)  10th of the month after the quarter. 
D)  end of the following quarter. 
E)  same day of the FICA and FIT deposits.

Exam 5: Unemployment Compensation Taxes

Instruction 5-1 Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Refer to Instruction 5-1 . Aaron Norman earned $24,900 for the year from Marcus Company. The company is subject to a SUTA tax of 4.7% on the first $9,900 of earnings. Determine:

An employer can use a credit card to pay the quarterly deposit of FUTA taxes during the year.

Employers have to pay a FUTA tax on only the first $3,500 of each part-time employee's earnings (1/2 of the full $7,000 limit).

The person who is not an authorized signer of Form 940 is:

For FUTA purposes, an employer must pay a higher FUTA tax rate on executives than on nonsupervisory personnel.

If an employee has more than one employer during the current year, the taxable wage base applies separately to each of those employers, unless one employer has transferred the business to the second.

FUTA tax deposits cannot be paid electronically.

Instruction 5-1 Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. a. Complete Part 2 of Form 940 based on the following information: b. Complete Part 5 of Form 940 for the employer given the breakdown of FUTA taxable

A federal unemployment tax is levied on:

For FUTA purposes, an employer can be any one of the following except :

Currently, none of the states imposes an unemployment tax on employees.

If an employer pays unemployment taxes to two states, it will have the same SUTA tax rate in both states.

All of the states allow employers to make voluntary contributions into their state unemployment fund so that a lower tax contribution rate would be assigned.

Unlike Form 941, there is no penalty for the late filing of Form 940.

The mailing of Form 940 is considered timely if it is postmarked on or before the due date.

If the employer has made timely deposits that pay the FUTA tax liability in full, the filing of Form 940 can be delayed until:

When making a payment of FUTA taxes, the employer must make the payment by the: