Tax Preparation Tax Withholding and Estimated Taxes 3

Question 1

FICA payroll taxes withheld from an employee's paycheck fund which two federal programs?

Accepted Answer

Social Security and Medicare

Answer

FICA (Federal Insurance Contributions Act) taxes consist of a 6.2% Social Security tax (up to the annual wage base) and a 1.45% Medicare tax, funding both programs.

Question 2

For 2024, the Social Security wage base means that the 6.2% Social Security tax applies only to wages up to what amount?

Accepted Answer

$168,600

Answer

For 2024, the Social Security wage base is $168,600; earnings above this threshold are exempt from the 6.2% Social Security tax, though the 1.45% Medicare tax has no wage cap.

Question 3

The Additional Medicare Tax of 0.9% applies to wages and self-employment income above what threshold for single filers?

Accepted Answer

$200,000

Answer

Single filers owe the additional 0.9% Medicare surtax on wages or self-employment income exceeding $200,000; the threshold is $250,000 for married filing jointly.

Question 4

By what deadline must employers furnish Form W-2 to their employees?

Accepted Answer

January 31

Answer

Employers are required to provide employees with Form W-2 by January 31 of the year following the tax year, giving employees sufficient time to prepare and file their tax returns.

Question 5

Form 941, the Employer's Quarterly Federal Tax Return, is used to report which of the following?

Accepted Answer

Federal income tax withheld plus the employer's and employee's FICA taxes

Answer

Form 941 is filed quarterly to report wages paid, federal income tax withheld from employees, and both the employer's and employee's shares of Social Security and Medicare taxes.

Tax Preparation Practice Test

Tax Preparation Practice Test

Tax Preparation Tax Withholding and Estimated Taxes 3