Chapter 13 - Federal Income Tax: Withholding and Reporting Requirements

Question 1

what is wages?

Answer 1

all remuneration whether in cash or goods, paid by an employer to an employee for services performed

Question 2

how much is the TIP minimum to be considered to be a tipped employee?

Answer 2

more than $20 in any calendar month

Question 3

what is form 4070?

Answer 3

employer is required to deduct and withhold the tax on those tips that are reported by the employee to the employer in a written statement furnished to the employer

Question 4

what is deposit of tax?

Answer 4

if the total tax withheld by the employer from all employees amounts to more than $500 at the end of a quarter, the tax met be deposited in an “authorized financial institution” or a federal reserve bank

Question 5

what is form 941?

Answer 5

something that employer must file quarterly.

Question 6

what is W-3?

Answer 6

employer’s W-2

Question 7

what is TEFRA?

Answer 7

if total reported tip income is less than 8% of the establishment’s gross receipts, such establishment would be required to make an allocation of tips among tipped employees pursuant to IRS regulations

Question 8

what are the 4 information that required to report on TEFRA?

Answer 8

1) Gross receipts of the establishment from food and beverage sales (other than receipts from carry-out sales and mandatory 10% or more service charge sales)
2) the amount of aggregate charge receipts (other than receipts from carry-out sales and 10% service charge sales)
3) the aggregate amount of tips shown on such charge receipts
4) reported tip income, and mandatory service charges of less than 10%

Question 9

what if 8% threshold is not met?

Answer 9

the employer must allocate an amount equal to the difference between 8% of gross receipts and the amount reported by employees for the year to all tipped employees