Question 1

Which of the following forms is used by an employer to report quarterly wages and federal payroll tax withholdings and deposits?

Accepted Answer

A) Form 940 
B) Form 941 
C) Form 1099 
D) Form W-2 
E) None of the above

Question 2

Emily is a self-employed attorney.
a.​
Assuming that Emily earns $20,000 from her practice, calculate the total amount of her self-employment tax liability for 2016.
b.​
Assuming that Emily earns $135,000 from her practice, calculate the total amount of her self-employment tax liability for 2016.

Accepted Answer

The answer of Emily is a self-employed attorney.
a.​
Assuming that Emily...

Question 3

If taxpayers fail to provide their bank with a taxpayer identification number, they are subject to backup withholding on interest payments.

Accepted Answer

A) True 
 B)False

Question 4

In 2016, the maximum amount of wages subject to the Social Security portion of the FICA tax is $118,500.

Accepted Answer

A) True 
 B)False

Question 5

Household employers are not required to pay FICA taxes on cash payments of less than $2,000 paid to any household employee in a calendar year.

Accepted Answer

A) True 
 B)False

Question 6

For 2016, the maximum base amount for computing the Medicare portion of the self-employment tax is $150,000.

Accepted Answer

A) True 
 B)False

Question 7

The two most common methods of determining federal income tax withholding are the percentage method and the wage bracket method.

Accepted Answer

A) True 
 B)False

Question 8

Richard is employed by a major defense contractor and earns $156,000 in 2016. Calculate:
a.The amount of Social Security tax withheld from his income
b.The amount of Medicare tax withheld from his income
c.The amount of FUTA withheld from his income

Accepted Answer

The answer of Richard is employed by a major defense...

Question 9

Which of the following types of income is subject to the self-employment tax?

Accepted Answer

A) Interest income 
B) Gain on sale of real estate 
C) Income from a sole proprietor's law practice 
D) Dividends from stock 
E) None of the above

Question 10

Choose the incorrect answer. In completing a Form W-4, employees may claim extra allowances:

Accepted Answer

A) If they are paying alimony. 
B) If they have tax credits. 
C) If they expect to have large amounts of itemized deductions. 
D) If they have high levels of interest and dividend income.

Question 11

Marty earned $5,000 in interest income from the Honey Springs Bank. She failed to notify the bank that she was not subject to backup withholding.
a.If Marty's taxable income puts her in the 25 percent bracket, how much would Honey Springs Bank withhold on the $5,000 of interest earnings?
b.If Marty's taxable income puts her in the 15 percent bracket, how much would Honey Springs Bank withhold on the $5,000 of interest earnings?

Accepted Answer

The answer of Marty earned $5,000 in interest income from...

Question 12

Provide answers to the following questions:
​
a.What form does an employer use to report wages to an employee?
b.When must the employer give this form to the employee?
c.What form does an employer use to report wages to the Social Security Administration?
d.When must the employer file the form with the Social Security Administration?

Accepted Answer

The answer of Provide answers to the following questions:
​
a.What form...

Question 13

If an individual taxpayer's quarterly estimated tax payments equal or exceed 70 percent of the tax due for the current year, the taxpayer will not be subject to the penalty for underpayment of estimated tax.

Accepted Answer

A) True 
 B)False

Question 14

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations. In which situation would this not be required?

Accepted Answer

A) A nanny who earns $22,000 a year 
B) A baby-sitter who earns $1,300 a year 
C) A cook who is paid $35,000 a year 
D) A cleaning lady who is paid $8,000 a year 
E) The taxpayer would not have to pay Social Security and Medicare taxes in any of the above situations

Question 15

Which one of the following payroll tax deposit schedules is not a rule that applies for a class of employers?

Accepted Answer

A) One-day deposit rule 
B) Eight-day deposit rule 
C) Semi-weekly deposit rule 
D) Monthly deposit rule 
E) Yearly deposit rule

Question 16

Mark the correct answer. FICA taxes are:

Accepted Answer

A) 7.65 percent of all earned income with no limitations. 
B) 7.65 percent of earned income up to $150,000. 
C) Paid by the employee and by the employer. 
D) Not subject to cost of living adjustments each year.

Question 17

Redford's salary was $124,000 in 2016. What would his total combined FICA tax (OASDI & Medicare) withheld from his salary be for the year?

Accepted Answer

A) $8,951 
B) $9,052 
C) $9,145 
D) $9,486 
E) None of the above is correct

Question 18

For 2016, the Social Security portion of the FICA tax is imposed at a rate of:

Accepted Answer

A) 6.2 percent for the employee and 7.65 percent for the employer. 
B) 6.2 percent for only the employer. 
C) 6.2 percent for only the employee. 
D) 6.2 percent for the employee and 6.2 percent for the employer. 
E) None of the above.

Question 19

Which of the following items may be subject to the self-employment tax?

Accepted Answer

A) A partner's distributive share of partnership income 
B) Dividend income 
C) Capital gains 
D) Interest income 
E) None of the above

Question 20

Steve is a single man who lives by himself. He has one job as a computer technician. How many withholding allowances can he claim?

Accepted Answer

A) 2 
B) 3 
C) 5 
D) 10 
E) He can claim any number of withholding allowances that he believes will leave him with proper withholding.

Exam 9: Withholding Estimated Payments and Payroll Taxes

Which of the following forms is used by an employer to report quarterly wages and federal payroll tax withholdings and deposits?

Emily is a self-employed attorney. a. Assuming that Emily earns $20,000 from her practice, calculate the total amount of her self-employment tax liability for 2016. b. Assuming that Emily earns $135,000 from her practice, calculate the total amount of her self-employment tax liability for 2016.

If taxpayers fail to provide their bank with a taxpayer identification number, they are subject to backup withholding on interest payments.

In 2016, the maximum amount of wages subject to the Social Security portion of the FICA tax is $118,500.

Household employers are not required to pay FICA taxes on cash payments of less than $2,000 paid to any household employee in a calendar year.

For 2016, the maximum base amount for computing the Medicare portion of the self-employment tax is $150,000.

The two most common methods of determining federal income tax withholding are the percentage method and the wage bracket method.

Richard is employed by a major defense contractor and earns $156,000 in 2016. Calculate: a.The amount of Social Security tax withheld from his income b.The amount of Medicare tax withheld from his income c.The amount of FUTA withheld from his income

Which of the following types of income is subject to the self-employment tax?

Choose the incorrect answer. In completing a Form W-4, employees may claim extra allowances:

If an individual taxpayer's quarterly estimated tax payments equal or exceed 70 percent of the tax due for the current year, the taxpayer will not be subject to the penalty for underpayment of estimated tax.

A taxpayer would be required to pay Social Security and Medicare taxes for a domestic employee in all but one of the following situations. In which situation would this not be required?

Which one of the following payroll tax deposit schedules is not a rule that applies for a class of employers?

Mark the correct answer. FICA taxes are:

Redford's salary was $124,000 in 2016. What would his total combined FICA tax (OASDI & Medicare) withheld from his salary be for the year?

For 2016, the Social Security portion of the FICA tax is imposed at a rate of:

Which of the following items may be subject to the self-employment tax?

Steve is a single man who lives by himself. He has one job as a computer technician. How many withholding allowances can he claim?