Betty's Section 4 - 10 Review Material

Question 1

An employee has two wage attachments—one for child support and one for a creditor—and net pay is not sufficient to cover both. Which of the following is correct, assuming it is February 15, 2020?
a. Creditor receives disposable pay up to 25%
b. Child support receives disposable pay up to 50%, and any remainder not to exceed 25% of disposable pay goes to the creditor
c. Child support receives disposable pay up to 50%, and $175.50 goes toward the creditor garnishment
d. No wages are subject to attachment

Answer 1

b. Child support receives disposable pay up to 50%, and any remainder not to exceed 25% of disposable pay goes to the creditor

Question 2

. If a deposit obligation is $6,000, how much must be deposited on the due date to be considered timely?
a. $6,000
b. $5,880 $6000 x 98% = $5,880 which is greater than $100
c. $100
d. $5,520

Answer 2

$5,880 $6000 x 98% = $5,880 which is greater than $100

Question 3

Carlos is hired as a police officer by the county on August 8, 2020. He is not covered by a retirement plan offered by the county. Which of the following FICA tax rates apply?
a. Medicare at 1.45%
b. Social Security at 6.20%
c. Combined FICA at 7.65%
d. Exempt from FICA

Answer 3

c. Combined FICA at 7.65%

Question 4

Acme, Inc. receives a child support withholding order for employee Joan on January 14, 2024. Joan separates from employment on March 31, 2024. The last child support withholding deduction was made on March 25, 2024. Under the FLSA, how long must Acme retain the withholding order and records of wage deductions under the order?
a. March 25, 2024
b. March 31, 2024
c. March 31, 2027 3 years from termination
d. March 25, 2025

Answer 4

March 31, 2027 3 years from termination

Question 5

If an employer makes a fourth-quarter state unemployment contribution of $2,000 after the due date of Form 940, the maximum amount of contribution that may be applied toward the tentative credit is:
a. $2,000
b. $1,500
c. $200
d. $1,800 $2000 x 90% = $1800

Answer 5

$1,800 $2000 x 90% = $1800

Question 6

An IAT is what kind of transaction?
a. Internal
b. International
c. Interest
d. Income

Answer 6

International

Question 7

. Under federal law, the maximum amount that may be attached for a defaulted student loan, assuming there are no other wage attachments having priority, is:
a. 25%
b. 15%
c. 50%
d. 28%

Answer 7

b. 15%

Question 8

If an employer timely paid all deposits and for the full amount, when is the Form 941 due for wages paid in February?
a. March 31
b. April 10
c. May 10 this is the 10 day auto extension for April 30 filing date
d. April 30

Answer 8

c. May 10 this is the 10 day auto extension for April 30 filing date

Question 9

John is hired as a ditch digger by the City of Anytown on July 5, 2024, and begins work on July 6, 2024. The employees of this ditch digging department are covered by an approved public retirement/pension agreement as of their first day of employment. Which of the following applies to John for 2024?
a. Exempt from FICA
b. Combined FICA at 7.65%
c. Medicare at 1.45%
d. Social Security at 6.20%

Answer 9

Medicare at 1.45%

Question 10

The following would be considered a valid document in proving only the identity of an employee over age 18:
a. Driver’s license containing photograph or description of the individual
b. U.S. Citizen ID Card
c. Birth certificate
d. Social Security card

Answer 10

a. Driver’s license containing photograph or description of the individual

Question 11

Acme Inc. is a semiweekly depositor. For 2024, which form would Acme use to report its payroll tax liabilities to the IRS?
a. Form 945
b. Form 944
c. Schedule B
d. Schedule A

Answer 11

Schedule B

Question 12

ABC Company’s federal tax withholding liability is $3,239.63, state tax withholding is $563.10, and employee’s FICA tax withheld is $2,108.16, and the 3rd party FICA Tax is $144.00. All employees had reached the 2020 Social Security wage base in the preceding payroll period but no one has earned greater than $200,000. Its backup withholding liability is $450.00. What is ABC Company’s total Form 941 deposit?
a. $6,504.89
b. $8,325.05
c. $7,311.95
d. $7,599.95 Medicare ($2108.16 x 2) + 3239.63 (FIT) + $144.00 Er piece of third party sick pay = $7,599.95

Answer 12

d. $7,599.95 Medicare ($2108.16 x 2) + 3239.63 (FIT) + $144.00 Er piece of third party sick pay = $7,599.95

Question 13

Employee Juan is concurrently employed by Shavings Inc. and Woodmaster, Inc., the common paymaster for Shavings, Inc. In tax year 2024, Juan was paid Social Security wages of $99,700 by Shavings, Inc. and Social Security wages of $69,800 by Woodmaster Inc. as of December 31, 2024. What Social Security wage amount does Woodmaster, Inc. report on Juan’s Form W-2?
a. $99,700 for Shavings, Inc., and $69.800 for Woodmaster, Inc.
b. $168,600 for Shavings, Inc.
c. $168,600 for Woodmaster, Inc. reported by the common paymaster
d. $99,700 for Shavings, Inc. and $69,800 for Woodmaster, Inc.

Answer 13

$168,600 for Woodmaster, Inc. reported by the common paymaster

Question 14

Given the same information that is in Question 13, what is the answer if Woodmaster Inc. is a reporting agent instead of a common paymaster?
a. $99,700 for Shavings Inc. and $69,800 for Woodmaster Inc.
b. $168,600 for Shavings, Inc.
c. $168,600 for Woodmaster, Inc.
d. $99,700 for Shavings, Inc. and $68,900 for Woodmaster, Inc.

Answer 14

$99,700 for Shavings Inc. and $69,800 for Woodmaster Inc.

Question 15

Assuming that an employee earned $180,000 in FICA taxable earnings in 2024, how much would be reported on the Form W-2 in boxes 3 and 5?
a. Box 3 = $168,600, Box 5 = $180,000
b. Box 3 = $168,600, Box 5 = $168,600
c. Box 3 = $180,000, Box 5 = $168,600
d. Box 3 = $180,000, Box 5 = $180,000

Answer 15

. Box 3 = $168,600, Box 5 = $180,000

Question 16

An employee worked 43 hours in one workweek at a rate of $8 per hour. The employer pays 1.5 times the regular rate of pay for all hours worked in excess of 40 per workweek. Which of the following amounts would generally be excluded from payroll earnings when computing the workers’ compensation insurance premium?
a. $48
b. $36
c. $24
d. $12 premium pay is excluded from WC

Answer 16

$12 premium pay is excluded from WC

Question 17

A nonexempt public-sector employee works 44 hours in the workweek. Accrued compensatory time off must be recorded as:
a. 4 hours
b. 6 hours 1.5 times OT hours worked is comp time
c. 0 hours
d. 44 hours
18. Sew and Go Corporation

Answer 17

b. 6 hours 1.5 times OT hours worked is comp time

Question 18

Sew and Go Corporation pays employees of five different unrelated companies, each with different EINs. There is no concurrent employment. With IRS approval, Sew and Go may:
a. Combine wage limits for all companies when determining FICA and FUTA taxes
b. Administer establishment reporting as though one corporation
c. Use one EIN when filing Forms 941 and W-2 as a reporting agent
d. Qualify as a common paymaster

Answer 18

Use one EIN when filing Forms 941 and W-2 as a reporting agent

Question 19

The proper way to report nontaxable third-party sick pay for $1,150 in box 12 is:
a. J $1150.00
b. J 1,150.00
c. J 1150
d. J 1150.00

Answer 19

d. J 1150.00

Question 20

For calendar year 2024, the proper FUTA rate for making deposits for the first three quarters of the year is:
a. 5.4%
b. 6.0%
c. 0.6%
d. 7.65%

Answer 20

c. 0.6%

Question 21

Which of the following must be included on Form W-2?
a. Group-term life insurance over $50,000
b. De minimis fringe benefits
c. Uniform allowances
d. Miscellaneous deductions

Answer 21

Group-term life insurance over $50,000

Question 22

Employee Bobby received an erroneous commission check in 2023 of $500. His federal and FICA taxable earnings including the erroneous payment for 2023 were $35,500. Bobby repays the $500 overpayment in 2024. Under the claim-of-right rule, what are the adjusted taxable wage amounts to be reported on the 2023 Form W-2c?
a. Federal taxable wages = $35,500, Social Security/Medicare wages = $35,500
b. Federal taxable wages = $35,000, Social Security/Medicare wages = $35,500
c. Federal taxable wages = no change, Social Security/Medicare wages = $35,000
d. Federal taxable wages = $35,000, Social Security/Medicare wages = $35,000
 

Answer 22

Federal taxable wages = no change, Social Security/Medicare wages = $35,000

Question 23

Harpo Inc. is a semiweekly depositor. It pays wages on Friday that result in a deposit obligation of $99,000. It receives a statement from the third-party payer of sick pay on the same day indicating that the employer owes Social Security and Medicare tax in the amount of $2,000. When is the deposit for taxes owed on the sick pay due?

a. The following Monday
b. The following Wednesday
c. The Friday that the statement is received from the third party
d. The following Tuesday

Answer 23

The following Monday

Question 24

Assuming the employer’s FUTA tax liability is $497 at the end of December, and it will pay its FUTA tax with the Form 940, when is the Form 940 due?
a. February 10
b. January 31
c. December 31
d. February 28

Answer 24

January 31

Question 25

An employee was reimbursed a total of $61.00 for the use of his personal car for 100 business miles. Assuming that the reimbursement is $3 above the government-specified rate, how would this reimbursement be reported on the Form W-2, assuming it is January 2024? a. Box 1 = $61.00, Box 3/5 = $61.00, Box 14 = $3 b. Box 1 = $3, Box 3/5 = $3, Box 14 = $61.00 c. Box 1 = $3, Box 3/5 = $3, Box 14 = $3 d. Box 1 = $61.00, Box 3/5 = $61.00, Box 14 = $61.00

Answer 25

b. Box 1 = $3, Box 3/5 = $3, Box 14 = $61.00

Question 26

Which of the following business entities would most likely be allowed to use the common paymaster option? a. Limited liability company b. Partnership c. Corporation d. All of the above

Answer 26

c. Corporation

Question 27

For tax year 2024, the following would not be reported in box 12 of Form W-2: a. Employee contributions to a §401(k) plan b. Nontaxable third-party sick pay c. Taxable group-term life over $50,000 d. Personal use of a company-owned vehicle

Answer 27

d. Personal use of a company-owned vehicle

Question 28

The period that tax documents are necessary for Internal Revenue Service assessment purposes under audit is: a. 3years b. 4 years c. 7 years d. 15 years “under audit” is the key to this question

Answer 28

d. 15 years “under audit” is the key to this question

Question 29

Warren’s payroll deductions on July 13, 2024, are $50 for medical insurance, $125 for taxes, 10% of gross wages for §401(k), and $25 for credit union shares. A federal tax levy of $4,000 is received on July 31, 2024. Warren’s payroll deductions do not change between July 13, 2024, and July 31, 2024. Assume that the amount exempted from federal tax levy according to Publication 1494 for the period is $187.50, and the employee's gross wages for the week ending July 31, 2024 are $500. How much should the employer remit to the IRS for the July 31 pay period? a. $260.58 b. $67.31 c. $187.50 d. $62.50 $500 − ($50 + $125 + $50 + $25) = $250 (take home pay) $250 (take home pay) − $187.50 (exempt from levy) = $62.50 (payment to IRS)

Answer 29

d. $62.50 $500 − ($50 + $125 + $50 + $25) = $250 (take home pay) $250 (take home pay) − $187.50 (exempt from levy) = $62.50 (payment to IRS)

Question 30

New prenotifications are not suggested under which of the following circumstances? a. Change in name b. Change in account number c. Change in bank transit routing number d. Change of job responsibility

Answer 30

Change of job responsibility

Question 31

The form used to certify that an employee's wages are eligible for the WOTC is: a. 4782 b. 3300 c. 8850 d. W-11

Answer 31

. 8850

Question 32

An employee's Form W-4 must be retained: a. Until a new Form W-4 has been completed b. Until the end of the calendar year c. For a period of 4 years from the employee's termination d. For a period of 2 years from the employee's termination

Answer 32

For a period of 4 years from the employee's termination

Question 33

On July 24, 2024, the amount of pay weekly exempt from creditor garnishment under the Federal Wage Garnishment law is: a. $154.50 b. $175.50 c. $217.50 d. $187.50

Answer 33

c. $217.50

Question 34

A Form I-9 is required for an employee who returns to work from a temporary lay off: a. Each time an employee returns to work b. If more than three years have passed since the last Form I-9 was completed c. If more than six months have passed since the last Form I-9 was completed d. If the rehire is a lawful immigrant

Answer 34

If more than three years have passed since the last Form I-9 was completed

Question 35

Which of the following describes the proper tax treatment of sick payments received by an employee who is separated from employment because of retirement disability (assuming the plan makes payments exclusively for retirement disability)? a. Social Security, Medicare, and FUTA are mandatory; federal income tax withholding not required b. Social Security, Medicare, FUTA, and federal income tax withholding are mandatory c. Social Security, Medicare, and FUTA are not required; federal income tax withholding is mandatory d. Social Security, Medicare, FUTA, and federal income tax withholding are not required

Answer 35

c. Social Security, Medicare, and FUTA are not required; federal income tax withholding is mandatory

Question 36

One of the following statements is true. Select the true statement. a. Fair Labor Standards Act (FLSA) regulations require that original time cards be retained for 4 years. b. FLSA regulations require that payroll registers be retained for 2 years. c. IRS regulations require that tax returns be retained for 3 years. d. IRS regulations require that tax returns be retained for 4 years

Answer 36

d. IRS regulations require that tax returns be retained for 4 years

Question 37

On June 15, 2024, an employee received a distribution from a nonqualified deferred compensation plan of $750,000. Prior to June 15, 2024, the employee was paid regular wages of $110,000 and bonuses totaling $300,000. How much federal income tax should be withheld from this NQDC distribution, assuming the employer uses the supplemental withholding rate when to do so is discretionary? a. $80,000 b. $105,000 c. $172,500 d. $75,000

Answer 37

c. $172,500 $750,000 + $300,000 = $1,050,000 $1,050,000 − $1,000,000 = $50,000 $750,000 − $50,000 = $700,000 $700,000 × 22% = $154,000 $50,000 × 37% = $18,500 $154,000 + $18,500 = $172,500

Question 38

Forget-Me-Not, Inc. has just released its 2023 Forms W-2. Under the statutory record-keeping requirements, until what date must copies of these forms be retained? a. April 15, 2025 b. April 15, 2026 c. April 15, 2027 d. April 15, 2028

Answer 38

April 15, 2027

Question 39

An exempt public-sector employee works 44 hours in the workweek. Accrued compensatory time off can be recorded as: a. 4 hours b. 6 hours c. 0 hours d. 3 hours

Answer 39

c. 0 hours, exempt

Question 40

Third-party sick pay is reported by the third-party payer (assume the employer pays its share of FICA and federal unemployment tax): a. On line 5a of Form 941 b. On line 2 of Form 941 c. In box 1 of Form W-2 d. In Part 2 of Form 940

Answer 40

On line 5a of Form 941

Question 41

A live direct deposit can be made if a prenotification is sent within how many banking days of the settlement date? a. 1 b. 2 c. 6 d. 3

Answer 41

d. 3

Question 42

. An employer receives the following wage attachments in this order: (1) an administrative wage garnishment (AWG), (2) a child support withholding order, and (3) a state tax levy. Further assume that state tax levies take priority after child support orders under state law. Under federal law, what priority should be given to these multiple attachments? a. AWG, state tax levy, child support b. Child support, state tax levy, AWG c. State tax levy, AWG, child support d. Child support, AWG, state tax levy Under federal law, an AWG takes priority over all other attachments later received, except for family support. Federal law supersedes state law.

Answer 42

D. Child support, AWG, state tax levy

Question 43

The total cost of the disability insurance premium is $35 per month. The employer pays 60% and the employee pays 40% with pretax dollars under the employer's flexible benefits plan. Assuming that an employee receives $1000 in sick pay because of temporary disability, what portion of the payment is included in gross taxable wages? a. $1000 pretax is the same as employer paid b. $400 c. $600 d. $0

Answer 43

a. $1000 pretax is the same as employer paid

Question 44

. In which of the following situations is a Form 940 required? a. Organizations described under §501(c)(3) b. Wages paid in excess of $1,500 for the year c. Wages paid in excess of $1,500 for any calendar quarter d. Household employees paid less than $1,000 for the quarter

Answer 44

c. Wages paid in excess of $1,500 for any calendar quarter

Question 45

. If a Form W-4 is not obtained from a newly hired employee, the company must withhold as if the employee claimed: a. Single/Married filing separately with no adjustment b. Married filing Jointly with one adjustment c. Single/Married filing separately with two adjustments d. Married filing jointly with two adjustments

Answer 45

a . Single/Married filing separately with no adjustment

Question 46

Assume that an employee is covered by an employer's dependent care assistance plan. Under this cash reimbursement plan, the employee is entitled to a cash reimbursement equal to $200 a month. In the months of January–December 2024, the employee was reimbursed in the amount of $2,000, which represented benefits due for the first 10 months of the year. The employee received $400 in 2025 for benefits earned in the months of November and December 2024. How much should the employer report on the Form W-2 in box 10 (dependent care assistance) for 2024? a. $2,000 b. $400 c. $0 d. $2,400

Answer 46

d. $2,400

Question 47

The employer may designate a worker as an independent contractor if the worker: a. Signs a contract of independent worker status b. Meets the common-law test c. Is part time or temporary d. Fails to meet the common-law test

Answer 47

Fails to meet the common-law test

Question 48

The following form may be submitted to the Internal Revenue Service to request a written determination of a worker's status: a. Form 8919 b. Form 4669 c. Form SS-8 d. Form 4670

Answer 48

c. Form SS-8