Payroll Compliance & Reporting 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 Compliance & Reporting flashcards as text
An employer fails to deposit payroll taxes by the required due date. Which IRS penalty structure applies for deposits that are 1 to 5 days late?
Answer: 2% of the unpaid tax
The IRS assesses a 2% failure-to-deposit penalty for employment tax deposits that are 1 to 5 days late.
Which form must employers use to reconcile annual Social Security and Medicare wages reported on Forms W-2 with quarterly 941 filings?
Answer: Form W-3
Form W-3 is the transmittal that summarizes all W-2 wages and tax amounts, allowing reconciliation against quarterly 941 totals.
A company hires a contractor and pays them $650 during the year. What is the 1099-NEC filing requirement?
Answer: No 1099-NEC is required because the amount is below $600
The 1099-NEC threshold is $600; payments below that amount do not require a 1099-NEC filing.
Under the FLSA, which record must employers retain for at least three years?
Answer: Payroll records including hours worked and wages paid
The FLSA requires employers to keep payroll records such as time cards and wage payment records for a minimum of three years.
Which IRS deposit schedule applies to an employer whose total tax liability in the lookback period was $50,000 or less?
Answer: Monthly depositor
Employers with $50,000 or less in employment tax liability during the lookback period are classified as monthly depositors.
State unemployment tax (SUTA) rates are experience-rated. What does 'experience rating' mean in this context?
Answer: Rates are based on the employer's history of former employees claiming unemployment benefits
Experience rating means an employer's SUTA rate reflects its own history of unemployment claims filed by former employees.
Which section of the Internal Revenue Code imposes the trust fund recovery penalty (TFRP) on responsible persons who willfully fail to remit withheld payroll taxes?
Answer: Section 6672
IRC Section 6672 allows the IRS to assess a trust fund recovery penalty equal to 100% of the unpaid trust fund taxes against responsible persons.