Chap 5 Quiz

Question 1

The Tax Cuts and Jobs Act of 2017 changed the process of determining amounts withheld for ______ as of January 1, 2020.

Multiple Choice

• Federal income tax
• Medicare tax
• State income tax
• Social Security tax

Answer 1

Federal income tax

Question 2

Which of the following federal income tax withholdings scenarios will have the highest income tax?

Multiple Choice

• Married, 3 dependents
• Single, 1 dependent
• Married, 0 dependents
• Single, 5 dependents

Answer 2

Single, 1 dependent

Question 3

Federal income tax, Medicare tax, and Social Security tax amounts withheld from employee pay are computed based on gross pay, less pre-tax deductions, and deducted to arrive at net pay.

T/F

Answer 3

True

Question 4

Jesse is a part-time nonexempt employee in Austin, Texas, who earns $12.50 per hour. During the last biweekly pay period he worked 35 hours. He is married filing join and takes the standard withholding, which means his federal income tax deduction is $0, and has declared additional federal tax withholding of $30 per pay period. What is his net pay?

Multiple Choice

• $374.03
• $353.03
• $354.28
• $378.03

Answer 4

$374.03

Question 5

Which of the following is used in the determination of the amount of federal income tax to be withheld from an employee per pay period?

Check all that apply.

• Date of birth
• Period salary
• Marital status
• Prior year’s tax return

Answer 5

• Period salary
• ## Marital status

Question 6

Which of the following statements is/are true about Social Security tax deductions from gross pay?

Check all that apply.

• The wage base is $137,700.
• The tax is computed on all earnings.
• Section 125 deductions are not subject to Social Security tax.
• The tax rate is 6.0%.

Answer 6

• ## The wage base is $137,700.
• ## Section 125 deductions are not subject to Social Security tax.

Question 7

A firm has headquarters in Indiana but has offices in California and Utah. For employee taxation purposes, it may choose which of those three states income tax laws it wishes to use.

T/F

Answer 7

False.

The employer must pay employee taxes based on each employee’s permanent residence.

Question 8

Post-Tax Deductions are amounts ________.

Multiple Choice

• that the employer chooses to withhold after assessing the employee’s tax liability
• that are only mandatory deductions like garnishments and union dues
• that are voluntarily chosen by the employee
• that Include both mandatory and voluntary deductions

Answer 8

that Include both mandatory and voluntary deductions