2021 IRS Circular E Flashcards
- An employer shall keep for at least __________ years all records of employment taxes.
A. 1
B. 2
C. 3
D. 4
- D 8 Recordkeeping
- How many business days does a semi-weekly depositor have to deposit withholding taxes?
A. 1
B. at most 2
C. at least 3
D. at least 4
- C 29 Semiweekly schedule depositors
- If a contractor deducted less than the correct amount of tax from any wage payment, the
contractor _____________.
A. is required by law to inform the employee in writing within five working days
B. may deduct the amount of under collection from later payments to the employee
C. must fill out form 988B and return it to the internal revenue service within 12 working days
D. must make up the difference from the contractor’s own funds within 10 working days
- B 35 Collecting underwithheld taxes from employees
- If, at the end of a quarter, a contractor’s total FUTA tax is $150, the contractor _______________.
A. may add the tax to the amount for deposit for the next quarter
B. must deposit the tax during the first month after the quarter
C. must deposit the tax during the second month after the quarter
D. must deposit the tax during the third month after the quarter
- A 37 Depositing FUTA Tax
- A contractor employs a full time college student in his construction business paying him gross wages of $500 per week. The contractor is required to pay/report which federal taxes if this student is in a work-study program established by his college?
A. none
B. Income tax (only)
C. Income tax & FICA (only)
D. Income tax & Federal Unemployment tax (only)
- C 45 Chart: Special Rules for Various Types of Services and Payments
- An employer is liable for the unemployment tax, if in the current or preceding calendar year_________
A. The employer paid at least $500 in wages in a calendar quarter
B. The employer paid at least $1,000 in wages in a calendar quarter
C. The employer had at least one employee for any portion of a day in 10 different calendar weeks in a year.
D. The employer had at least one employee for any portion of a day in 20 different weeks in a year
- D 39 Who Must Pay?/ General Test
- For federal tax purposes, which of the following is not considered an employee?
A. Agent/Driver delivering food
B. Real Estate agent
C. Traveling sales selling hotel supplies for one company
D. Part-time worker
- B 12 Who Are Employees?
- If an employer withholds income tax from an employee’s regular wages, the employer may withhold a flat ______ for supplemental wages.
A. 5%
B. 10%
C. 20%
D. 22%
- D 20 Supplemental Wages – Supplemental wages identified separately
from regular wages
- When taxes are not deposited when due and the delay is more than 16 days late, a ______penalty is charged.
A. 5%
B. 10%
C. 15%
D. 20%
- B 31 Deposit Penalties
- Deposits for FUTA taxes are due by _____.
A. The 15th day of the month following the end of the quarter
B. By the 5th day of the next month following the quarter
C. By the last day of the first month after the quarter ends
D. At the end of the eighth monthly period
- C 39 When to Deposit
11.The maximum credit against the FUTA for payments to state unemployment funds is _____.
A. 2.8%
B. 3.5%
C. 5.4%
D. 6.2%
- C 39 Figuring FUTA Tax
- For FUTA tax purposes, an employer is any person or organization that has paid wages of _____________ or more in any calendar quarter.
A. $500
B. $1,000
C. $1,500
D. $2,000
- C 38 Who Must Pay?/ General Test
- A household employee in a private home, age 20, is paid $100 a week salary and has worked 25 weeks. Which taxes are required?
A. Income Taxes and FICA
B. FICA and Federal unemployment taxes
C. Federal unemployment taxes and income taxes
D. None of the above
- B 43 Chart: Special Rules for Various Types of Services and Payments
- You must use ______to make all federal tax deposits.
A. EFT
B. FICA
C. Form 940
D. WBC
- A 31 How To Deposit
- As of Dec. 31, 2021, an employer has 3 employees; each will be paid a salary as shown below:
Employee #1 — $70,000
Employee #2 — $52,000
Employee #3 — $49,500
The total amount of FICA taxes that the employer will have to deposit will be ___________.
A. $15,484
B. $25,995
C. $12,998
D. $26,239
- D 25-26 Tax rates and the social security wage base limit
($70,000 + 52,000 + 49,500) x 7.65% x 2 = $26,239.50
- According to the Federal unemployment Tax Act, if a contractor acquires a business from someone else who was an employer liable for FUTA tax, you ______________.
A. may be able to count the wages that employer paid to the employees who continue to work for you when you figure the $7,000 FUTA tax wage base.
B. must pay a tax rate based on the premise that you are a new employer with new employees
C. you may pay taxes based on percentage of days in balance of fiscal year
D. may count the wages that employer paid to up to three employees who continue to work for you when you figure the wage limit
- A 39 Successor Employer
- The quarterly Federal Tax Form 941 summarizes tax liability for the employer and includes _________.
A. liability insurance
B. withheld income taxes and/or FICA
C. workers compensation insurance
D. federal unemployment insurance tax
- B 33 Filing Form 941 or Form 944/Form 941
- Which of the following wages would not be subject to Federal Unemployment tax paid by the employer?
A. wages paid to a Canadian who frequently enters the U.S. to work as a carpenter
B. severance pay
C. wages paid to a deceased worker’s estate in the same calendar year as the dateof the worker’s death
D. wages paid to the employer’s spouse
- D 41 Chart: Special Rules for Various Types of Services and Payments
- According to Circular E instructions, Copy A of all 2020 paper and electronic Forms W-2 shall be sent to the Social Security Administration (SSA) by the last day of __________.
A. January
B. February
C. March
D. December
- A 9 By January 31/File Form W-2
- A contractor is filing Form 941 for taxes which were withheld from employees for the first quarter of the year (January, February, and March). All the taxes were deposited when they were due. What is the LATEST date (without penalty) that the contractor can file this return?
A. April 15
B. April 30
C. May 10
D. May 15
- C 10 By April 30, July 31, October 31, and January 31/File Form 941
- When does Form W-4 claiming exemption from withholding expire?
A. January 31
B. February 15
C. when the employee gives the employer a new Form W-4 (for example if marital status changes)
D. December 31
- B 9 On February 16/ Forms W-4 claiming exemption from withholding
expire
- Form 1099-NEC must be used to report payments of ________ or more to persons not treated as employees.
A. $500
B. $600
C. $650
D. $700
- B 6 Information Returns
