Question 1

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 2

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 3

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 4

Employees must be given Form W-2 on or before January 31 following the close of the calendar year.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

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 worker's compensation law.

Question 6

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 7

Exhibit 4-1:
Use the following tables to calculate your answers.  ​
​  ​Source: Internal Revenue Service 
-Refer to Exhibit 4-1.Calculate the amount to withhold from the following employees using the biweekly table of the percentage method.
Kenneth Karcher (single,1 allowance = $155.80),$895 wages
__________
Mary Kenny (married,2 allowances = $311.60),$1,900 wages
__________
Thomas Carney (single,0 allowances),$1,460 wages
__________

Accepted Answer

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

Question 8

Form W-3 is filed with the Social Security Administration when transmitting information returns on Forms W-2.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Which of the following forms is used to report rents paid over $600 to landlords?

Accepted Answer

A)  Form 1099-R 
B)  Form 1099-INT 
C)  Form 1099-MISC 
D)  Form 1099-G 
E)  Form 8027

Question 11

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 12

The amount of federal income taxes to be withheld is determined after subtracting from the employee's gross wages any local and state taxes.

Accepted Answer

A) True 
 B)False

Question 13

There is no limit to the amount of educational assistance that is exempt from federal income tax withholdings.

Accepted Answer

A) True 
 B)False

Question 14

Gere became the father of triplets on June 20.He must file an amended Form W-4 on or before June 30.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following cannot be included in a cafeteria plan?

Accepted Answer

A)  Health insurance 
B)  Group-term life insurance (first $50,000 of coverage) 
C)  Dependent care assistance (first $5,000) 
D)  Self-insured medical reimbursement plan 
E)  Educational assistance

Question 16

The withholding of federal income and FICA taxes from a tipped employee is made from the employee's wages that are under the employer's control.

Accepted Answer

A) True 
 B)False

Exam 4: Income Tax Withholding

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

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.

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.

Employees must be given Form W-2 on or before January 31 following the close of the calendar year.

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

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:

Form W-3 is filed with the Social Security Administration when transmitting information returns on Forms W-2.

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

Which of the following forms is used to report rents paid over $600 to landlords?

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

The amount of federal income taxes to be withheld is determined after subtracting from the employee's gross wages any local and state taxes.

There is no limit to the amount of educational assistance that is exempt from federal income tax withholdings.

Gere became the father of triplets on June 20.He must file an amended Form W-4 on or before June 30.

Which of the following cannot be included in a cafeteria plan?

The withholding of federal income and FICA taxes from a tipped employee is made from the employee's wages that are under the employer's control.