Payroll and Tax Reporting Flashcards

An employee earns $52,000 annually. What is the maximum Social Security tax they will pay in 2024?

Answer: $3,224.00

The 2024 Social Security wage base is $168,600 at 6.2%, but since $52,000 is below that, the employee pays 6.2% × $52,000 = $3,224.00.

Which IRS form must employers use to report annual wages and taxes withheld for each employee?

Answer: Form W-2

Form W-2 (Wage and Tax Statement) is the annual form employers provide to employees and the SSA reporting wages and withheld taxes.

A company pays employees on a semi-monthly basis. How many payroll periods does it have per year?

Answer: 24

Semi-monthly means twice per month (e.g., the 1st and 15th), resulting in 24 pay periods per year.

What is the employer's FUTA tax rate on the first $7,000 of each employee's wages, assuming full credit applies?

Answer: 0.6%

After applying the standard 5.4% SUTA credit, the net FUTA rate is 0.6% on the first $7,000 of wages.

Which section of the Internal Revenue Code governs the taxation of nonqualified deferred compensation plans?

Answer: Section 409A

IRC Section 409A sets rules for nonqualified deferred compensation, including timing of deferrals and distributions.

An employer withholds $1,800 in federal income tax, $744 in Social Security, and $174 in Medicare from employee wages this month. What is the total employer tax deposit required?

Answer: $3,462.00

The employer matches the $744 Social Security and $174 Medicare, so total = $1,800 + $744 + $174 + $744 + $174 = $3,636; but matching only employee SS+Medicare = $744+$174=$918 employer share; total deposit = $1,800 + $744 + $174 + $744 + $174 = $3,636.

What is the deadline for employers to furnish Form W-2 to employees for the prior calendar year?

Answer: January 31

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