Payroll Administration & Taxation Flashcards
7 cards from real CPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Payroll Administration & Taxation flashcards as text
An employer pays an employee a $5,000 moving expense reimbursement in 2026. How is this taxed under current law?
Answer: Fully taxable as wages subject to all payroll taxes
The Tax Cuts and Jobs Act of 2017 suspended the moving expense exclusion for most employees through 2025, making reimbursements fully taxable wages.
Which of the following correctly describes the 'accountable plan' rule for expense reimbursements?
Answer: Employee must have a business connection, substantiate expenses, and return any excess
An accountable plan requires business connection, adequate substantiation within a reasonable period, and return of excess advances.
What is the maximum amount of employer-provided dependent care FSA benefits that can be excluded from an employee's income in 2024?
Answer: $5,000 ($2,500 if married filing separately)
The dependent care FSA exclusion limit is $5,000 per household ($2,500 for married filing separately).
An employer fails to deposit payroll taxes on time. The failure-to-deposit penalty for deposits 6-15 days late is:
Answer: 5% of the undeposited amount
The IRS penalty for deposits that are 6 to 15 days late is 5% of the undeposited tax amount.
Which test does the IRS use FIRST to determine if a worker is an employee or independent contractor?
Answer: Behavioral control test
The IRS common-law test evaluates behavioral control first, examining whether the company controls how work is performed.
A nonresident alien employee on a visa has not submitted a Form W-4. What withholding must the employer apply?
Answer: Single with no adjustments, plus an additional amount per IRS instructions for NRAs
Nonresident aliens who don't submit a W-4 are withheld at single with no adjustments, plus the NRA additional withholding amount per IRS Publication 15-T.
What document must an employer complete and retain to verify an employee's identity and work authorization under the Immigration Reform and Control Act?
Answer: Form I-9
Form I-9 must be completed for every new hire to verify identity and employment eligibility under IRCA.