FREE Fundamental Payroll Certification MCQ Question and Answers
What methodology is employed to assess the worth of a fringe benefit that an employer offers to a worker?
The general valuation rule is used to calculate a fringe benefit's worth for Internal Revenue Service (IRS) purposes. A fringe benefit's fair market value, or how much an employee would have to pay for it from a third party, is its overall value. The employee's perceived value or the actual cost to the company are not factors in determining fair market value.
Which form might an employee use to report tips received to an employer?
The tips that employees receive and which must be taken into account for determining the necessary taxes are recorded on Form 4070, Employee Report Tips to Employer. Tips that total $20 or more in a single calendar month are regarded by FICA as taxable income; Form 4070 must be sent to the employer by the eleventh day of the month that follows the month in which tips were earned. Employers must take the FICA tax out of any reported tips. Taxes may be paid immediately from tips or from a fund that the employee has established. The employer's portion must be included in the tax payment for tips to FICA. If tips are not recorded, FICA may fine an employee up to 50% of the tip taxes.
What situation can lead an employee to file a lawsuit against an employer for breaking the Americans with Disabilities Act?
The Americans with Disabilities Act (ADA) and other laws mandate that companies protect the privacy of their employees' medical information. They safeguard an employee's privacy and forbid disability-based discrimination on the part of employers. The medical records of an employee must be kept apart from their employment files. The following individuals may have access to the medical information on an as-needed basis, in addition to Human Resources and payroll staff who have signed confidentiality agreements:
> Medical, safety, and first-aid personnel to provide medical treatment or for safety purposes
> Supervisors who need to make accommodations for a disability
> Government officials as required by law > Insurance companies who require a medical exam
An employee may file a lawsuit for an ADA violation when a corporation fails to provide proper confidentiality about the employee's medical information and when the employee's medical records are compromised.
What impact does an employer paying the employee's portion of Social Security and Medicare taxes on a fringe benefit have on the employee's income?
The value of a fringe benefit must be included in the employee's income when an employer pays Social Security and Medicare taxes on its taxable portion. The employer is responsible for any unpaid and uncollected taxes for these perks in the event that an employee ceases employment.
Which employees of a corporation must adhere to a confidentiality agreement respecting personnel records?
Due to the fact that payroll and human resources staff have access to all employees' personal information, a confidentiality agreement is a necessity for the position. Employee management policies, including those for hiring, terminating, punishing, and managing both present and prospective employees, are developed and put into effect by human resources personnel. The payroll staff is in charge of updating information for each payroll period, keeping employee data in the payroll system, confirming the data, and generating checks or electronic deposits.
How should the employer calculate the employee's withholding if the employee doesn't submit a Form W-4?
When an employee fails to submit a W-4, their status is set to single with no additional modifications. A Form W-4 is filled out by an employee when beginning a new job. The employee's filing status (married or single, for example), anticipated additional income, deductions, and credits are all listed on the W-4. The employer can determine how much federal income tax ought to be deducted from his paychecks using this information. Until and unless the employee files a new form, this one and the withholding instructions provided on it are still in force.
Which of the following punishments is not imposed on an employer that submits a W-2 form that is incomplete or incorrect?
After 30 days, each correctly submitted W-2 form will cost $35. The following sanctions may be imposed on an employer who submits incomplete or inaccurate W-2 forms:
> Up to a maximum penalty of $75,000 per employer, or $25,000 for a small business, the employer is charged $15 for each late or erroneous W-2 that is submitted within 30 days.
> Employers are subject to fines of up to $150,000, or $50,000 for small businesses if W-2s are submitted after 30 days but before August 1.
> If after August 1 the employer submits the W-2, they will be fined $50 for each late or erroneous W-2, up to a maximum of $250,000 or $100,000 for small businesses.
> The penalty is $100 per return or 10% of the total payroll for the year if an employer completely fails to file W-2s. In this instance, there is no maximum punishment.
> The penalty for the employer is $50 per form if the names and Social Security numbers do not match.