Question 1

Which of the following statements about the FICA tax is not true?

Accepted Answer

A) The FICA tax is composed of two parts, Social Security and Medicare. 
B) Self-employed individuals may elect to pay either FICA taxes or self-employment taxes. 
C) FICA taxes are paid by both the employees and their employers. 
D) The income amount subject to FICA tax has increased significantly over the years. 
E) Wages subject to FICA tax that are received by a self-employed individual reduce the individual's maximum self-employment tax base.

Question 2

When required, gambling winnings are reported by the gambling establishment on Form 1099-MISC.

Accepted Answer

A) True 
 B)False

Question 3

Taxpayers with self-employment income who also have Form W-2 wage income from employment may be able to avoid making estimated tax payments by filing a Form W-4 and increasing the amount of their withholding.

Accepted Answer

A) True 
 B)False

Question 4

For purposes of the new additional 0.9% Medicare surtax on earned income, a single taxpayer having earned income of more than $200,000 is generally subject to the tax.

Accepted Answer

A) True 
 B)False

Question 5

Household employers are not required to pay FICA taxes on part-time household employees.

Accepted Answer

A) True 
 B)False

Question 6

Mark has two jobs during 2016. One employer withheld and paid FICA taxes on $70,200 of Mark's salary and the other employer withheld and paid FICA taxes on $48,800 in salary paid to Mark. Calculate the amount of Mark's credit for the overpayment of Social Security taxes that he should claim on his 2016 Form 1040.

Accepted Answer

The answer of Mark has two jobs during 2016. One...

Question 7

Employers must provide employees with their Form W-2 by February 15 of the year following the calendar year of payment of the wages.

Accepted Answer

A) True 
 B)False

Question 8

Tom had net earnings of $80,000 from the plant nursery he owns. What is his liability for FICA taxes on his earnings?

Accepted Answer

The answer of Tom had net earnings of $80,000 from...

Question 9

An individual who expects to receive more than $500 of income from sources other than wages meets the requirements for having to file quarterly estimated tax payments.

Accepted Answer

A) True 
 B)False

Question 10

If a husband and wife both work, they must divide their withholding allowances equally on their W-4 Forms.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is true with regard to the reimbursement of employee business expenses?

Accepted Answer

A) Reimbursements of ordinary and necessary expenses are subject to federal income tax withholding. 
B) Excess reimbursements of ordinary and necessary expenses are never subject to withholding. 
C) Reimbursements received by an employee under a plan which contains a requirement to return excess amounts, and the employee does so on a timely basis, are excluded from the definition of wages subject to withholding. 
D) Provided that reimbursements are received by an employee under a plan which requires the employee to substantiate the expenses to his employer, the amounts are excluded from the definition of wages subject to withholding, without regard to whether the employee actually substantiates the expenditures. 
E) All of the above are true statements.

Question 12

Employer deposits of withheld taxes may be made to any bank.

Accepted Answer

A) True 
 B)False

Question 13

The Foemina Corporation has two employees, Nancy and Penny.

Accepted Answer

The answer of The Foemina Corporation has two employees, Nancy...

Question 14

In 2016, Lew earned wages of $386,724.
a.What is the amount of Social Security tax withheld from his salary?
b.What is the amount of Medicare tax (including surtax) withheld from his salary?

Accepted Answer

The answer of In 2016, Lew earned wages of $386,724.
a.What...

Question 15

Mike is a single taxpayer. For the payroll period of November 2016, he is paid wages of $3,400, monthly. Mike claims three allowances on his Form W-4.
a.Use the percentage method to calculate the amount of Mike's withholding for a monthly pay period.
b.Use the withholding tables to determine the amount of Mike's withholding for the same period.

Accepted Answer

The answer of Mike is a single taxpayer. For the...

Question 16

Individual quarterly estimated tax payments are filed with Form 1040-ES.

Accepted Answer

A) True 
 B)False

Question 17

Mary is self-employed for 2016. Mary estimates her required annual estimated tax payment for 2016 to be $4,000. Mary had a $500 overpayment of last year's taxes which she will apply against her first quarter estimated payment.
a.How much should Mary pay with her first quarter estimated tax voucher?
b.When is the payment due?

Accepted Answer

The answer of Mary is self-employed for 2016. Mary estimates...

Question 18

The FUTA tax for 2016 is based on 6.2 percent of each employee's wages up to $10,000.

Accepted Answer

A) True 
 B)False

Question 19

Janet is single and claims two allowances on her Form W-4. Her salary is $1,800 per month.
a.Use the percentage method to calculate the amount of Janet's withholding for a monthly pay period.
b.Use the withholding tables to determine the amount of Janet's withholding for a monthly pay period.

Accepted Answer

The answer of Janet is single and claims two allowances...

Question 20

Reimbursements of moving expenses are always subject to withholding.

Accepted Answer

A) True 
 B)False

Exam 9: Withholding Estimated Payments and Payroll Taxes

Which of the following statements about the FICA tax is not true?

When required, gambling winnings are reported by the gambling establishment on Form 1099-MISC.

Taxpayers with self-employment income who also have Form W-2 wage income from employment may be able to avoid making estimated tax payments by filing a Form W-4 and increasing the amount of their withholding.

For purposes of the new additional 0.9% Medicare surtax on earned income, a single taxpayer having earned income of more than $200,000 is generally subject to the tax.

Household employers are not required to pay FICA taxes on part-time household employees.

Employers must provide employees with their Form W-2 by February 15 of the year following the calendar year of payment of the wages.

Tom had net earnings of $80,000 from the plant nursery he owns. What is his liability for FICA taxes on his earnings?

An individual who expects to receive more than $500 of income from sources other than wages meets the requirements for having to file quarterly estimated tax payments.

If a husband and wife both work, they must divide their withholding allowances equally on their W-4 Forms.

Which of the following statements is true with regard to the reimbursement of employee business expenses?

Employer deposits of withheld taxes may be made to any bank.

The Foemina Corporation has two employees, Nancy and Penny.

In 2016, Lew earned wages of $386,724. a.What is the amount of Social Security tax withheld from his salary? b.What is the amount of Medicare tax (including surtax) withheld from his salary?

Individual quarterly estimated tax payments are filed with Form 1040-ES.

The FUTA tax for 2016 is based on 6.2 percent of each employee's wages up to $10,000.

Janet is single and claims two allowances on her Form W-4. Her salary is $1,800 per month. a.Use the percentage method to calculate the amount of Janet's withholding for a monthly pay period. b.Use the withholding tables to determine the amount of Janet's withholding for a monthly pay period.

Reimbursements of moving expenses are always subject to withholding.