Tax Preparation Tax Forms and Procedures 2 — Questions and Answers
Question 1: An employer must deposit federal payroll taxes by what general deadline for monthly depositors?
- The 7th of the following month
- The 10th of the following month
- The 15th of the following month (Correct answer)
- The last day of the following month
Correct answer: The 15th of the following month
Monthly depositors must deposit payroll taxes by the 15th day of the month following the payroll month.
Question 2: Form 941 is filed by employers to report:
- Annual wages and tips
- Quarterly payroll taxes including income tax withheld and FICA (Correct answer)
- Annual FUTA taxes
- Self-employment income
Correct answer: Quarterly payroll taxes including income tax withheld and FICA
Form 941, Employer's Quarterly Federal Tax Return, reports wages paid, federal income tax withheld, and employer/employee FICA taxes each quarter.
Question 3: What is the penalty for failing to file Form 1040 on time (without an extension)?
- 0.5% per month on unpaid tax
- 5% per month on unpaid tax (up to 25%) (Correct answer)
- Flat $500 penalty
- 10% of total tax owed
Correct answer: 5% per month on unpaid tax (up to 25%)
The failure-to-file penalty is 5% of unpaid tax per month (up to 25%), significantly larger than the failure-to-pay penalty of 0.5% per month.
Question 4: Which form is used by nonresident aliens to file a US income tax return?
- Form 1040
- Form 1040-NR (Correct answer)
- Form 1040-SR
- Form W-7
Correct answer: Form 1040-NR
Form 1040-NR is the US Nonresident Alien Income Tax Return for foreign nationals with US-source income.
Question 5: A taxpayer receives a CP2000 notice from the IRS. What does this indicate?
- The return was accepted with no changes
- There is a discrepancy between reported income and third-party information (Correct answer)
- The taxpayer owes a large balance due
- The return is being audited
Correct answer: There is a discrepancy between reported income and third-party information
A CP2000 is an IRS automated underreporter notice proposing changes when income or deductions on the return don't match third-party documents.
Question 6: The IRS statute of limitations to assess additional tax is generally how long from the due date of the return?
- 1 year
- 2 years
- 3 years (Correct answer)
- 10 years
Correct answer: 3 years
The IRS has 3 years from the later of the return due date or filing date to assess additional taxes, with exceptions for substantial understatements and fraud.
Tax Preparation Tax Forms and Procedures 2
An employer must deposit federal payroll taxes by what general deadline for monthly depositors?