Question 1

The special withholding allowance may be claimed only by those employees who do not itemize deductions on their income tax returns.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Ted Duerson,previously unemployed for the calendar year,earned $13,200 during the biweekly period from September 29 to October 13 (20th payroll period).He has made a written request for the part-year employment method of withholding.If Duerson is married and claims zero withholding allowances,how much FIT tax would be withheld from his gross pay using the part-year employment method (using the wage-bracket table)?

Accepted Answer

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

Question 4

For which of the following payments is the employer required to withhold federal income taxes?

Accepted Answer

A)  Advances made to sales personnel for traveling expenses 
B)  Tipped employee's monthly tips of $120 
C)  Deceased person's wages paid to the estate 
D)  Minister of Presbyterian church 
E)  All of the above

Question 5

Noncash fringe benefits that are provided employees are treated as nontaxable income and thus are excluded from federal income tax withholding.

Accepted Answer

A) True 
 B)False

Question 6

When you pay supplemental wages at the same time as regular wages,the method of calculating the withholding is the same for vacation payments as for semiannual bonuses.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

On August 2,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 4.

Accepted Answer

A) True 
 B)False

Question 10

An employer must withhold federal income taxes on both the tips reported by tipped employees and the tips that the employer allocates to the employees.

Accepted Answer

A) True 
 B)False

Question 11

All taxable noncash fringe benefits received during the year can only be added to the employees' taxable pay on the last payday of the year.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-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 14

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 15

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

Accepted Answer

A) True 
 B)False

Question 16

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 17

Which of the following statements correctly describes the withholding of federal income taxes and social security taxes on tips?

Accepted Answer

A)  Tips amounting to $10 or more in a calendar month must be reported by tipped employees to their employers. 
B)  The withholding of federal income taxes on employees' reported tip income is made from the amount of tips reported by employees. 
C)  When employees report taxable tips in connection with employment in which they also receive regular wages,the amount of tax to be withheld on the tips is computed as if the tips were a supplemental wage payment. 
D)  Employers do not withhold FICA taxes on the tipped employees' reported tip income. 
E)  None of the above statements is correct.

Question 18

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-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 to calculate...

Question 19

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Use the appropriate table to determine the amount to withhold for federal income tax from each of the following biweekly wages (biweekly withholding allowance = $155.80):
Patrick Patrone (single,2 allowances),$925 wages
__________
Carson Leno (married,4 allowances),$1,195 wages
__________
Carli Lintz (single,0 allowances),$700 wages
__________
Gene Hartz (single,1 allowance),$2,500 wages
__________
Mollie Parmer (married,2 allowances),$3,600 wages
__________

Accepted Answer

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

Question 20

If married employees do not claim their marital status on Form W-4,the employer must withhold according to the withholding tables for single employees.

Accepted Answer

A) True 
 B)False

Exam 4: Income Tax Withholding

The special withholding allowance may be claimed only by those employees who do not itemize deductions on their income tax returns.

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

For which of the following payments is the employer required to withhold federal income taxes?

Noncash fringe benefits that are provided employees are treated as nontaxable income and thus are excluded from federal income tax withholding.

When you pay supplemental wages at the same time as regular wages,the method of calculating the withholding is the same for vacation payments as for semiannual bonuses.

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

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.

On August 2,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 4.

An employer must withhold federal income taxes on both the tips reported by tipped employees and the tips that the employer allocates to the employees.

All taxable noncash fringe benefits received during the year can only be added to the employees' taxable pay on the last payday of the year.

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

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

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

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.

Which of the following statements correctly describes the withholding of federal income taxes and social security taxes on tips?

If married employees do not claim their marital status on Form W-4,the employer must withhold according to the withholding tables for single employees.