Practice Test Geeks(APA) American Payroll Association Certification Practice Test
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Taxation and Compliance Flashcards

7 cards from real APA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Taxation and Compliance flashcards as text

  1. An employer pays $400 in moving expense reimbursements to an employee. Under current tax law (post-TCJA), how is this treated?

    Answer: Fully taxable as wages

    Under the Tax Cuts and Jobs Act (2018–2025), employer-provided moving expense reimbursements are fully taxable wages, except for active military moves.

  2. What is the employer's deadline to furnish Form W-2 to employees each year?

    Answer: January 31

    Employers must furnish Form W-2 to employees by January 31 of the year following the tax year.

  3. Which box on Form W-2 reports Social Security wages subject to Social Security tax?

    Answer: Box 3

    Box 3 of Form W-2 reports the total wages subject to Social Security tax, which may differ from Box 1 federal wages.

  4. An employee receives a $2 million bonus. What withholding rate applies to the amount exceeding $1 million?

    Answer: 37%

    Supplemental wages exceeding $1 million in a calendar year are subject to mandatory federal income tax withholding at the highest individual tax rate of 37%.

  5. Under the IRC Section 132, which fringe benefit allows an employer to exclude from income the cost of job-related education up to $5,250 annually?

    Answer: Educational assistance program

    IRC Section 127 educational assistance programs allow employers to exclude up to $5,250 per year in qualifying educational assistance from employee income.

  6. When must an employer deposit federal payroll taxes if it is a monthly depositor and the payroll is run on October 15?

    Answer: November 15

    Monthly depositors must deposit taxes accumulated during a calendar month by the 15th of the following month.

  7. Which IRS notice requires an employer to begin withholding child support from an employee's wages?

    Answer: Income Withholding for Support (IWO)

    The Income Withholding for Support (IWO) is the standardized order used to require employers to withhold child support from an employee's disposable earnings.