PRAU5Q

Unit 5: Income Tax Withholding - Quiz

 

Question 1. 1. Beech refuses to state her marital status on Form W-4 which she gave to you, the payroll manager, when she was hired. You should: (Points : 2)       tell Beech that it is OK since you know that she was recently divorced and is reluctant to talk about it.

      inform Beech that she will have to write the IRS and give her reasons for refusing to state her marital status.

      tell Beech that you will have to withhold income taxes as if she were married and had claimed one allowance.

      tell Beech that you will have to withhold income taxes according to the withholding table for a single employee with no allowances.

      advise Beech to write, “It is no business of yours.” in the margin of her Form W-4.

Question 2. 2. Under the federal income tax withholding law, which of the following is not defined as an employee? (Points : 2)       Partner who draws compensation for services rendered the partnership       General manager, age 66       Payroll clerk hired one week ago       Governor of the state of Florida       Secretary employed by a not-for-profit corporation

Question 3. 3. For which of the following payments is the employer required to withhold federal income taxes? (Points : 2)       Advances made to sales personnel for traveling expenses       Tipped employee's monthly tips of $120       Deceased person's wages paid to the estate       Minister of Presbyterian church       All of the above

Question 4. 4. Which of the following noncash fringe benefits does not represent taxable income subject to federal income tax withholding? (Points : 2)       Flight on employer-provided airline       Personal use of company car       Sick pay       Employer-paid membership to a country club       All of the above are taxable.

Question 5. 5. Which of the following cannot be included in a cafeteria plan? (Points : 2)       Health insurance       Group-term life insurance (first $50,000 of coverage)       Dependent care assistance (first $5,000)       Self-insured medical reimbursement plan       Educational assistance

Question 6. 6. All of the following are properly defined as wages subject to the withholding of federal income taxes except: (Points : 2)       year-end bonus.       kitchen appliances given by manufacturer in lieu of cash wages.       dismissal payment.       vacation pay.       payments made under worker's compensation law.

Question 7. 7. Which of the following forms is used to report the amount of distributions from pension and retirement plans? (Points : 2)       W-2c       1099-R       1099-PEN       W-3p       W-4

Question 8. 8. Which of the following statements correctly describes the withholding of federal income taxes and social security taxes on tips? (Points : 2)       Tips amounting to $10 or more in a calendar month must be re-ported by tipped employees to their employers.       The withholding of federal income taxes on employees' reported tip income is made from the amount of tips reported by employees.       When employees report taxable tips in connection with employment in which they also receive regular wages, the amount of tax to be withheld on the tips is computed as if the tips were a supplemental wage payment.       Employers do not withhold FICA taxes on the tipped employees' reported tip income.       None of the above statements is correct.

Question 9. 9. A company must withhold federal income taxes from payments made to independent contractors in which of the following cases? (Points : 2)       When there is a signed contract between the parties       When the contractor is paid more than $10,000       When the contractor is a corporation       When the contractor has not provided a taxpayer identification number and the contract is $600 or more       All of the above

Question 10. 10. A personal allowance: (Points : 2)

      amounted to $2,000 in 2012.

      may be claimed to exempt a portion of the employee's earnings from withholding.

      is indexed for inflation every calendar quarter.

      may be claimed at the same time with each employer for whom an employee is working during the year.

      for one person is a different amount for a single versus a married taxpayer.