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Week #2

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Which of the following payments are not taxable for FICA?
a. Back-pay awards.
b. Wage supplements to cover difference between employees’ salaries and their military pay.
c. Dismissal pay.
d. Difference between employees’ regular wages and the amount received for jury duty.
e. Retroactive wage increase

b. Wage supplements to cover difference between employees’ salaries and their military pay

FICA defines all of the following as employees except:
a. vice presidents.
b. partners.
c. superintendents.
d. full-time life insurance salespersons.
e. payroll managers.

B. Partners

Tor F? Employers who fail to file employment tax returns are subject to both civil and criminal penalties

True

The taxes imposed under the Social Security Act consist of

– two taxes on employers. – two taxes on employees. – OASDI and HI taxes. – taxes on the net earnings of the self-employed.

The OASDI taxable wage base is correctly defined as:
a. all amounts earned by an employee during a calendar year.
b. the maximum amount of wages during a calendar year that is subject to the OASDI tax.
c. all amounts paid an employee during a calendar year.
d. all amounts either earned by, or paid to, an employee during a calendar year.
e. none of the above

B. The maximum amount of wages during a calendar year that is subject to the OASDI tax.

True or False…Currently, none of the states impose an unemployment tax on employees

False

FICA defines all of the following as wages except:
a. year-end bonuses.
b. standby payments.
c. total cash tips of $15 received by a tipped employee in May.
d. employees’ social security taxes paid for by the employer.
e. first six months of sick pay.

c. total cash tips of $15 received by a tipped employee in May.

True or False? In its definition of employee, FICA clearly distinguishes between classes or grades of employees

False

If the employer is tardy in paying the state contributions, the credit against the federal tax is limited to what percent of the late payments that would have been allowed as a credit if the contributions had been paid on time

90%

True or False? Employers do not pay payroll taxes on payments made to independent contractors.

True

True or False?Form 941 is used by employers to make their quarterly return of FICA taxes and withheld income taxes.

True

True or False? FICA does not consider the first six months of sick pay as taxable wages

False

True or False? The FICA tax rates and taxable wage bases are exactly the same for employees and employers.

True

True or False? FICA defines wages as including the cash value of meals provided for the convenience of the employees.

True

True or False? Employees are liable for their FICA taxes only until the taxes have been collected from their pay by their employer.

True

True or False? If an employee, who works two or more separate jobs, pays OASDI taxes on wages in excess of the taxable wage base, the employee is entitled to a refund of the overpayment

True

True or False? Self-employed persons include their self-employment taxes in their quarterly payment of estimated federal income taxes.

True

True or False? Unemployment taxes (FUTA and SUTA) do not have to be paid by an employer who has only part-time employees

False

For FUTA purposes, an employer can be any one of the following except:
a. an individual.
b. a partnership.
c. a trust.
d. a corporation.
e. All of the above can be employers.

e. all of the above can be employers

True or False? In the case of a part-time employee, the employer pays a FUTA tax on only the first $14,000 of earnings (double the regular limit).

False

A federal unemployment tax is levied on:
a. employees only.
b. both employers and employees.
c. employers only.
d. government employers only.
e. no one.

c. employers only

True or False? FUTA tax deposits cannot be paid electronically.

False

Included under the definition of employees for FUTA purposes are:
a. independent contractors.
b. insurance agents paid solely on commission.
c. student nurses.
d. officers of a corporation.
e. members of partnerships.

d. officers of a corporation.

True or False? Every employer is entitled to a 5.4 percent credit against the gross FUTA tax of 6.2 percent.

False

True or False? In order to obtain the maximum credit allowed against the federal unemployment tax, the employer must have paid its SUTA contributions by the due date of Form 940.

True

Which of the following types of payments are not taxable wages for federal unemployment tax?
a. Retirement pay
b. Cash prizes and awards for doing outstanding work
c. Dismissal pay
d. Bonuses as remuneration for services
e. Payment under a guaranteed annual wage plan

a. Retirement pay

True or False? Christmas gifts, excluding noncash gifts of nominal value, are taxable wages for unemployment purposes.

True

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