CPB / BookKeeping Payroll and Tax Reporting 2

Question 1

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

Accepted Answer

$3,224.00

Answer

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.

Question 2

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

Accepted Answer

Form W-2

Answer

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

Question 3

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

Accepted Answer

24

Answer

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

Question 4

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

Accepted Answer

0.6%

Answer

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

Question 5

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

Accepted Answer

Section 409A

Answer

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

CPB / BookKeeping Practice Test