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W-2, 1099 & Year-End Reporting Flashcards

7 cards from real CPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 W-2, 1099 & Year-End Reporting flashcards as text

  1. An employee participates in a 401(k) plan with $10,000 in elective deferrals. How are these deferrals reflected on the W-2?

    Answer: Reported in Box 12 with code D and excluded from Box 1 but included in Boxes 3 and 5

    Traditional 401(k) deferrals are reported in Box 12 with code D, reduce federal wages in Box 1, but remain subject to Social Security and Medicare taxes in Boxes 3 and 5.

  2. Which 1099 form replaced Form 1099-MISC Box 7 for reporting non-employee compensation starting in tax year 2020?

    Answer: 1099-NEC

    The IRS reintroduced Form 1099-NEC in 2020 specifically to report non-employee compensation, moving it out of 1099-MISC Box 7.

  3. An employee's health insurance premiums are paid through a Section 125 cafeteria plan. How does this affect W-2 reporting?

    Answer: The premiums reduce Box 1, Box 3, and Box 5 wages

    Section 125 cafeteria plan premiums are excluded from federal, Social Security, and Medicare wages, reducing Box 1, Box 3, and Box 5.

  4. What is the accelerated filing deadline for W-2 Copy A when an employer has 250 or more W-2 forms to file electronically?

    Answer: January 31

    Both electronic and paper filers must submit W-2 Copy A to the SSA by January 31, regardless of the number of forms.

  5. A 1099-R is issued to report distributions from which type of account?

    Answer: Pensions, annuities, retirement plans, or IRAs

    Form 1099-R reports distributions from pensions, annuities, retirement plans, profit-sharing plans, IRAs, and insurance contracts.

  6. Which W-2 box code is used to report employer-sponsored health coverage costs under the ACA reporting requirement?

    Answer: Code DD

    Box 12, code DD reports the cost of employer-sponsored health coverage, which is required for informational purposes under the Affordable Care Act.

  7. An independent contractor performs $800 of services but also purchases $200 in goods from the payer. What amount appears on the 1099-NEC?

    Answer: $800 — services only

    Only payments for services are reportable on Form 1099-NEC; payments for goods or merchandise are excluded from 1099-NEC reporting.