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Payroll and Tax Reporting Flashcards

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  1. Which of the following fringe benefits is generally EXCLUDED from an employee's gross income?

    Answer: Employer-paid health insurance premiums

    Employer-paid health insurance premiums are excluded from employees' gross income under IRC Section 106.

  2. A tip-earning employee who receives more than $20 in tips during a month must report those tips to the employer by:

    Answer: The 10th day of the following month

    Employees who receive $20 or more in tips in a calendar month must report them to the employer by the 10th day of the following month.

  3. Under FLSA rules, which employees are generally EXEMPT from overtime pay requirements?

    Answer: Employees earning at least $684/week in a bona fide executive role

    To qualify for the white-collar exemption, employees must earn at least $684 per week ($35,568/year) and meet the duties test for executive, administrative, or professional roles.

  4. What is the tax treatment of employer contributions to an employee's Health Savings Account (HSA)?

    Answer: Excluded from income up to statutory limits

    Employer HSA contributions are excluded from the employee's gross income, wages, and FICA taxes, up to the annual contribution limits.

  5. A semi-weekly depositor has a payroll tax liability that arises on a Wednesday. By which day must the deposit be made?

    Answer: The following Friday

    For semi-weekly depositors, liabilities arising on Wednesday, Thursday, or Friday must be deposited by the following Friday.

  6. Which form does an employer file to report FUTA taxes annually?

    Answer: Form 940

    Form 940 (Employer's Annual Federal Unemployment Tax Return) is used to report FUTA taxes, due January 31 of the following year.

  7. An employee's W-4 claims 'Exempt' from withholding. What action must the employer take regarding the exemption claim each year?

    Answer: Require the employee to resubmit a new W-4 claiming exempt by February 15

    A claim of exempt from withholding expires February 15 each year; the employee must submit a new W-4 by that date to continue the exemption.