CPM W-2, 1099 & Year-End Reporting 2 — Questions and Answers
Question 1: An employee receives both regular wages and a company car for personal use. How is the personal use value of the company car reported on the W-2?
- It is excluded from the W-2 as a working condition fringe benefit
- It is included in Box 1 wages and also reported in Box 14 (Correct answer)
- It is reported only in Box 12 with code V
- It reduces the employee's Box 1 wages
Correct answer: It is included in Box 1 wages and also reported in Box 14
The fair market value of personal use of a company car is taxable compensation included in Box 1 wages, and employers typically also report it in Box 14 for employee information.
Question 2: What is the deadline for furnishing W-2 forms to employees for the prior tax year?
- January 15
- January 31 (Correct answer)
- February 15
- February 28
Correct answer: January 31
Employers must furnish W-2 forms to employees by January 31 of the year following the tax year reported.
Question 3: A 1099-NEC must be filed for payments to a non-employee totaling at least how much in a calendar year?
- $500
- $600 (Correct answer)
- $1,000
- $2,000
Correct answer: $600
Payers must issue a 1099-NEC to non-employees who received $600 or more in non-employee compensation during the calendar year.
Question 4: Which W-2 box reports the total amount of Social Security wages subject to the Social Security tax?
- Box 1
- Box 3 (Correct answer)
- Box 5
- Box 7
Correct answer: Box 3
Box 3 reports Social Security wages, which may differ from Box 1 wages due to items like Section 125 cafeteria plan deductions.
Question 5: An employer discovers a W-2 error after filing. Which form is used to correct the error?
- W-2C (Correct answer)
- W-3C
- 1099-C
- 941-X
Correct answer: W-2C
Form W-2C (Corrected Wage and Tax Statement) is used to correct errors on previously filed W-2 forms.
Question 6: For 1099-MISC reporting, which box is used to report rent payments made to a landlord?
- Box 1 (Correct answer)
- Box 3
- Box 7
- Box 10
Correct answer: Box 1
Rent payments of $600 or more are reported in Box 1 of Form 1099-MISC.
Question 7: What is the purpose of Form W-3 in year-end reporting?
- To correct previously filed W-2 forms
- To transmit Copy A of all W-2 forms to the Social Security Administration (Correct answer)
- To report employer FUTA taxes
- To request an extension for W-2 filing
Correct answer: To transmit Copy A of all W-2 forms to the Social Security Administration
Form W-3 is the transmittal form that summarizes all W-2s filed and accompanies Copy A submissions to the Social Security Administration.
CPM W-2, 1099 & Year-End Reporting 2
An employee receives both regular wages and a company car for personal use.
How is the personal use value of the company car reported on the W-2?