CPB / BookKeeping Payroll and Tax Reporting 3

Question 1

A worker is classified as an independent contractor but the IRS reclassifies them as an employee. Which form does the employer use to report uncollected FICA taxes in this situation?

Accepted Answer

Form 941-X

Answer

Form 941-X (Adjusted Employer's Quarterly Federal Tax Return) is used to correct previously filed Form 941s when workers are reclassified.

Question 2

Under the lookback period rule, a new employer with no prior tax history is classified as a:

Accepted Answer

Monthly depositor

Answer

New employers with no prior tax history are automatically classified as monthly depositors for their first calendar year.

Question 3

Which payroll tax is NOT split equally between the employer and employee?

Accepted Answer

Additional Medicare Tax

Answer

The Additional Medicare Tax of 0.9% applies only to the employee on wages exceeding $200,000; there is no employer match.

Question 4

A cafeteria plan under Section 125 allows employees to pay for certain benefits with:

Accepted Answer

Pre-tax dollars, reducing taxable wages

Answer

Section 125 cafeteria plans let employees pay qualified benefit premiums with pre-tax dollars, reducing their federal income tax and FICA taxable wages.

Question 5

When must a monthly depositor submit payroll tax deposits for the prior month's liabilities?

Accepted Answer

The 15th of the following month

Answer

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

CPB / BookKeeping Practice Test

CPB / BookKeeping Practice Test

CPB / BookKeeping Payroll and Tax Reporting 3