APA Taxation and Compliance 3

Question 1

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

Accepted Answer

Fully taxable as wages

Answer

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

Question 2

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

Accepted Answer

January 31

Answer

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

Question 3

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

Accepted Answer

Box 3

Answer

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

Question 4

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

Accepted Answer

37%

Answer

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%.

Question 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?

Accepted Answer

Educational assistance program

Answer

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

(APA) American Payroll Association Certification Practice Test

(APA) American Payroll Association Certification Practice Test

APA Taxation and Compliance 3