Tax Planning & Compliance 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 Tax Planning & Compliance flashcards as text
Which rule governs when wages are considered 'paid' for federal income tax withholding purposes if the employer has received the funds but the employee has not yet cashed the check?
Answer: The constructive receipt doctrine
Under the constructive receipt doctrine, wages are taxable when made available to the employee without restriction, even if not yet physically received.
A semi-weekly depositor's payday falls on Wednesday. By what day must the payroll tax deposit be made?
Answer: The following Friday
For semi-weekly depositors, taxes on wages paid Wednesday through Friday must be deposited by the following Friday.
What is the maximum pre-tax employee contribution to a Health FSA (Flexible Spending Account) for 2024?
Answer: $3,200
The IRS increased the health FSA contribution limit to $3,200 for plan years beginning in 2024.
An employer pays an employee a $5,000 educational assistance benefit under a Section 127 plan. How much is excludable from the employee's gross income?
Answer: $5,250
Section 127 allows employees to exclude up to $5,250 per year in employer-provided educational assistance from gross income; $5,000 falls entirely within this limit.
When must an employer furnish W-2 forms to employees?
Answer: By January 31 of the following year
Employers must provide W-2 forms to employees by January 31 of the year following the calendar year in which wages were paid.
Under the 'responsible person' rule, who can be held personally liable for the Trust Fund Recovery Penalty (TFRP)?
Answer: Any person who willfully failed to collect or pay over trust fund taxes
The TFRP can be assessed against any person who had the duty and authority to ensure payroll taxes were paid and willfully failed to do so.
A tipped employee receives $600 in tips during a month but only reports $200 to the employer. What is the employer's obligation?
Answer: Allocate the tip shortfall to the employee and report it in Box 8 of Form W-2
When an employee's reported tips are less than 8% of gross receipts, the employer must allocate the shortfall and report it in Box 8 of the employee's W-2.