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Payroll Concepts > Concepts Module 1 > Flashcards

Concepts Module 1 Flashcards

1
Q

Employees can be paid by

A

Check, DD (EFT), Cash, paycards, payroll cards which are like debit cards used like cash

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2
Q

Employees pay

A

Federal income & employment taxes which are SS & MED

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3
Q

Fica is

A

Federal insurance contributions act, SS & Medicare taxes

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4
Q

Medicare taxes provide employees

A

With basic health insurance at 65 yrs old or earlier if they become disabled

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5
Q

Ss benefits

A

Pay retirement, disability, & survivor benefits

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6
Q

CMS , Center for Medicare & Medicaid services

A

Administers Medicare, for 65 & older, with certain disabilities, & or kidney failure

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7
Q

Unemployment Insurance Tax

A

Is based on a joint federal & state system

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8
Q

There are federal & state unemployment taxes

A

Alaska, NJ, PA employees pay part SUI. Employers pay all federal unemployment tax.

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9
Q

SDI: State Disability insurance only exist

A

In 5 states: CA, HAWAII, NJ, NY, RHODE ISLAND, + P.R

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10
Q

SDI

A

Pays state funds if injured not on the job , only in certain states. Employees & employers pay into these taxes

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11
Q

PFL

A

Is employee & employer paid. 10-11 states. CA, CO, CT, DC, MA , NJ, NY, OR, RI, WA . MD Oct 1 2024

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12
Q

Payroll challenges:

A

Complexity, communication, technology (automate timekeeping, record storage. Record retrieval,) & accuracy

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13
Q

Independent contractors

A

Pay both employer & employee SS & MED( SECA. )Self employment taxes.

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14
Q

An employee may qualify under common law test as employee but still can be a independent contractor based on the

A

Reasonable basis test

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15
Q

IRS Focus more payroll tax audits for

A

Worker misclassification. Because federal government has revenue losses due to independent contractors

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16
Q

Independent contractors get a

A

1099 NEC $600 OR MORE

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17
Q

Irs streamlined worker classification into

A

Behavioral control, financial control, & relationship of the parties

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18
Q

Federal tax law applies to all employees unless a

A

Corporations officer performing minor services & not entitled to compensation.

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19
Q

SS8 -

A

Determination of worker status for federal & income taxes WTH

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20
Q

While waiting for IRS to respond to SS8 companies should treat

A

Workers as a employee but won’t get refund for taxes

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21
Q

Reasonable basis test

A

Safe harbor rules 530 of the revenue act of 1978

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22
Q

Reasonable basis test include

A

Court decisions, irs rulings, irs audits, letter from attorney or CPA, a long history company practice

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23
Q

If doing worker classification audit

A

The IRS must give written notice of 530 safe harbor protections.

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24
Q

If doing worker classification audit

A

The IRS must give written notice of 530 safe harbor protections.

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25
Q

530 safe harbor , reasonable basis independent contractors must pay

A

Seca taxes by completing form 8919 for uncollected SS & MED Tax

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26
Q

FLSA Fair Labor Standards Act regulates

A

Minimum wage rates, OT pay, child labor, equal pay

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27
Q

Wage & hour division is the

A

DOL

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28
Q

Leased workers are often trained for the job

A

Not staffing agency workers

29
Q

PEO professional employer organization

A

Can provide HR, Payroll, & benefits management. Leasing companies may have better benefits of use than a small company

30
Q

CPEO Certified PEOs must meet

A

Tax status, background, experience, business location, annual financial audits, satisfy bond financial review, compute taxable income using accrual method & more, pay 1k annual fee etc

31
Q

Can pay 24% backup withholding taxes if 1099

A

Payee failed to proVIDed TIN
THE TIN is incorrect
The irs notified the payer TIN is incorrect
The payee identifies they are subject to backup WTH. If pd reported on 945.

32
Q

CPEOs can be penalized if

A

Schedule R not attached to 940 or 941. Or not including the EIN for each customer on schedule R, or if 940 or 941 not filed on a magnetic media

33
Q

Non discretionary bonus are included in

A

regular rate of pay

34
Q

When an employee receiving payments from a third-party sick pay provider fails to complete Form W-4S, Request for Federal Income Tax Withholding From Sick Pay, how much federal tax is withheld?

A

None

35
Q

Under the FLSA, the calculation of a nonexempt employee’s regular rate of pay must include:

A

cost-of-living adjustments.

36
Q

The FLSA exempts the following types of pay from the regular rate of pay –

A

gifts, paid time off, reimbursed expenses, discretionary bonuses, benefit plan contributions, and others.

37
Q

Employers in the private sector can keep their expenses for employee overtime down and remain in compliance with the FLSA by doing which of the following:

A

Giving employees who are paid biweekly, semimonthly, or monthly time off during the same pay period in which the overtime was worked that is at least equal to one and one-half hours off for each overtime hour worked.

38
Q

Under the FLSA white collar exemption rules, an exempt professional employee will meet all of the following requirements EXCEPT:

A

having authority to hire and fire employees.

39
Q

After an employer receives an IRS penalty notice for an employee’s failure to provide a correct name and SSN, the employer must request the employee to complete a Form W-4 by

A

December 31st.

40
Q

Employees must complete a new W-4 when

A

their change in status requires more income tax to be withheld. Tax liability increases

41
Q

Form W-4S ALLOWS the third-party sick pay provider to withhold federal income tax based on:

A

a flat amount.

42
Q

Which of the following factors is NOT used in determining a state’s right to unemployment claim coverage?

A

Length of service
Employers will consider the following four factors in descending order of importance: localization of services, base of operations, place of direction or control, and place of residence.

43
Q

Employers must remind employees to complete an amended Form W-4 if they have any changes in status

A

by December 1 of each year.

44
Q

What does the perjury statement on Form W-4 indicate?

A

The perjury statement on Form W-4 indicates the employee attests to the accuracy of the data on the form.

45
Q

If an employee lives in a state with a minimum wage of $8.00 and works in a state with a minimum wage of $7.75, what is the minimum wage that must be paid the employee?

A

$7.75 The greater of the minimum wage in the state where the work is preformed or the federal minimum wage must be paid.

46
Q

Under the FLSA, an employee’s work time commences when the employee

A

begins performing principal activities.

47
Q

The FLSA exempts attorneys, physicians and teachers from the white collar

A

minimum salary requirement.

48
Q

Under the FLSA, an exempt executive’s primary duty must include

A

managing an enterprise, department, or subdivision, direct the work of at least two or more full-time equivalent employees, and have the authority to hire and fire other employees.

49
Q

An exempt executive employee must manage

A

a customarily recognized department, direct the work of two or more full-time employees, and be paid a weekly salary of at least $684.00.

50
Q

All of the following are statutory employees EXCEPT: FT Real estate agent

A

There are four categories of statutory employees: agent-drivers/commission-drivers, life insurance salespersons, homeworkers, and traveling or city salespersons.

51
Q

In addition to the FLSA, the following federal laws regulate minimum wages and overtime pay to employees working for employers who are federal government contractors EXCEPT:

A

The Copeland Anti-Kickback Act

52
Q

Under the FLSA, police officers’ overtime pay is calculated based on

A

the work period basis. The work period may consist of 7 to 28 consecutive days.

53
Q

The FLSA regulates

A

overtime, minimum wage, child labor, and equal pay.

54
Q

Under the FLSA, when a highly compensated exempt employee receives less than $107,432.00 in compensation during the year, the employer may

A

Under the FLSA, when a highly compensated exempt employee receives less than $107,432.00 in compensation during the year, the employer may

55
Q

Under the FLSA, an employee is engaged to be waiting when

A

the employer restricts the employee’s behavior and does not permit personal business.

56
Q

Under IRS regulations, which of the following is NOT included in evaluating whether an employee is a student exempt from FICA taxation?

A

Eligibility for student discounts from vendors and suppliers

57
Q

Under the FLSA, the tipped employee’s total compensation (cash wages plus tips) must be a minimum of $7.25 per hour.

A

7.25 * 40

58
Q

The E-Verify program checks which databases to verify employment authorization of newly hired employees?

A

The E-Verify program checks SSA (Social Security Administration) and DHS (Department of Homeland Security) databases to verify employment authorization of newly hired employees.

59
Q

Under the FLSA white collar exemption rules, an exempt administrative employee must meet all of the following requirements EXCEPT:

A

managing a customarily recognized department. Exempt administrative employees must perform non-manual work relating to the general business operations, exercise discretion on matters of significance, and be paid a weekly salary of $684.00.

60
Q

When an employer receives a lock-in letter from the IRS, the employer first must

A

provide a copy of the lock-in letter to the employee within 10 business days of the lock-in letter’s receipt.

61
Q

If an individual does not submit a valid Form W-4P, how does the payer calculate federal income tax withholding from the distribution?

A

as if the filing status is single with no adjustments in Steps 2 - 4.

62
Q

Under the FLSA, when school is not in session, 14 and 15-year-old employees

A

can only work between 7:00 a.m. and 9:00 p.m. When school is in session, 14 and 15-year-old employee can only work between 7:00 a.m. and 7:00 p.m. and cannot work during school hours.

63
Q

Statutory employees are workers who are not subject

A

to federal income tax withholding but are subject to social security and Medicare taxes while having their wages reported on Form W-2.

64
Q

Under the FLSA, all of the following types of compensation are included when determining if an employee meets the highly compensated definition for the white collar exemption EXCEPT:

A

employee benefits. fringe benefits, board and lodging etc

65
Q

Which of the following items can periodic pension recipients specify on Form W-4P to determine their federal income tax withholding?

A

Dependents and other adjustments

66
Q

An employee claimed as a dependent by her parents, may claim exempt status on Form W-4 if the employee’s total income

A

is not more than $1,300.00 including unearned income of not less than $450.00.

67
Q

If an employee files w4 as an exempt, the employee has til when to file a new form

A

Feb 15 of the next year to continue the exempt status

68
Q

Employers must follow IRCA and verify e verify program to work

A

identify for right to work

69
Q
A

Payroll Concepts (1 decks)

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