Fundamental Payroll Certification Fundamental Payroll Employment Taxes and Withholding 4

Question 1

An employer pays supplemental wages of $8,000 combined with regular wages without identifying them separately. What withholding method must be used?

Accepted Answer

The aggregate method using the employee's current W-4

Answer

When supplemental wages are not separately identified from regular wages, the employer must use the aggregate method, adding the supplemental pay to the regular wages and withholding based on the combined total.

Question 2

Which of the following workers is generally considered an independent contractor and not subject to employer payroll tax withholding?

Accepted Answer

A worker who provides services using their own tools and sets their own schedule

Answer

A worker who controls their own schedule and uses their own tools is typically classified as an independent contractor, exempt from payroll tax withholding.

Question 3

What is the purpose of IRS Form 945?

Accepted Answer

Report federal income tax withheld from non-payroll payments such as pensions and gambling winnings

Answer

Form 945 is filed annually to report federal income tax withheld from non-payroll payments including pensions, annuities, IRAs, and backup withholding.

Question 4

Under the special accounting rule for fringe benefits, an employer may treat benefits provided in the last how many months of the year as provided in the following year?

Accepted Answer

3 months

Answer

Employers may use the special accounting rule to treat fringe benefits provided in the last 2 months of the calendar year as paid in the next calendar year for FICA and income tax withholding purposes.

Question 5

The Trust Fund Recovery Penalty (TFRP) can be assessed against which individuals?

Accepted Answer

Any person responsible for collecting and paying trust fund taxes who willfully fails to do so

Answer

The TFRP applies to any 'responsible person' — anyone with authority to collect, account for, or pay trust fund taxes — who willfully fails to do so.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Employment Taxes and Withholding 4