CB Payroll and Taxes

Question 1

What is the primary purpose of the Federal Insurance Contributions Act (FICA)?

Accepted Answer

To fund Social Security and Medicare programs

Answer

FICA is a U.S. law that requires employers and employees to contribute to Social Security and Medicare programs.

Question 2

Which form is used by employees to determine federal income tax withholding?

Accepted Answer

Form W-4

Answer

The IRS Form W-4 allows employees to specify their tax withholding preferences for federal income tax purposes.

Question 3

What is the deadline for employers to issue Form W-2 to employees?

Accepted Answer

January 31

Answer

Employers must provide Form W-2 to employees by January 31st of the following year to report wages and tax withholdings.

Question 4

Which payroll tax is paid only by employers?

Accepted Answer

FUTA

Answer

FUTA (Federal Unemployment Tax Act) is an employer-paid tax used to fund unemployment benefits.

Question 5

What is the main purpose of Form 941?

Accepted Answer

To report quarterly payroll taxes

Answer

Form 941 is used by employers to report payroll taxes, including federal income tax and Social Security/Medicare withholdings, on a quarterly basis.

(CB) Certified Bookkeeper Practice Test