CPP Payroll Tax Compliance

Question 1

What is the current Social Security tax rate for employees in the United States?

Accepted Answer

6.2% on wages up to the annual wage base limit

Answer

12.4% on all wages with no limit

Answer

3.1% on the first $50,000 of wages

Answer

15.3% on all earned income

Question 2

What is Form W-4 used for?

Accepted Answer

For employees to indicate their federal tax withholding preferences to their employer

Answer

To report annual wages and taxes to employees

Answer

To register a new business with the IRS

Answer

To file quarterly payroll tax returns

Question 3

What is the FICA tax and what does it fund?

Accepted Answer

Federal Insurance Contributions Act tax funding Social Security and Medicare

Answer

Federal Income Collection and Assessment tax

Answer

A state-level unemployment insurance tax

Answer

A voluntary retirement savings contribution

Question 4

When is the employer required to deposit payroll taxes with the IRS?

Accepted Answer

On a semi-weekly or monthly schedule based on the employer's total tax liability

Answer

Annually when filing the year-end tax return

Answer

Only when the IRS sends a notice requesting payment

Answer

Whenever the employer finds it convenient

Question 5

What is the Additional Medicare Tax?

Accepted Answer

An additional 0.9% tax on wages exceeding $200,000 for single filers, paid only by the employee

Answer

A 2% tax on all wages paid by the employer

Answer

A voluntary contribution to Medicare by high earners

Answer

A tax that only applies to self-employed individuals

Question 6

What is Form 941?

Accepted Answer

The Employer's Quarterly Federal Tax Return reporting wages, tips, and payroll taxes

Answer

An employee's annual wage statement

Answer

A state unemployment tax return

Answer

A new hire reporting form