CPP Misc 2

Question 1

Defined benefit pension plan

Answer 1

A plan in which employees are promised a certain level of benefits

Question 2

Totalization Agreement

Answer 2

Pay SS tax in only 1 country

Question 3

Business expense advances not spent

Answer 3

Must be returned to the employer within 120 days after the expenses were incurred to avoid taxation.

Question 4

Group Term Life

Answer 4

Is reported on Form W2 but not subject to federal income tax withholding

Question 5

Federal Tax Levy - what deductions are allowed from the employee’s pay when the employer receives a federal tax levy

Answer 5

Mandatory taxes, and all voluntary and involuntary deductions currently in place

Question 6

Form 4070

Answer 6

Report used by employees to report tips

Question 7

To continue exempt status a new W4 form is required by

Answer 7

February 15th

Question 8

Substantial Presence Test

Answer 8

• 31 days current year
• 1/3 days 1st preceding year
• 1/6 days 2nd preceding year

Must equal at least 183 days

Question 9

Physical Presence Test

Answer 9

Present in a foreign country 330 days over a 12 month period to qualify for the foreign earned income exclusion

Question 10

Form 2555

Answer 10

Form filed to claim bonafide resident status

Question 11

Excluding Foreign Earned Income

Answer 11

US citizens & resident alien employees working outside the US can exclude up to $101,300 of foreign earned income from their gross income in 2016.

16% of 101,300
Ex: 26,500-16208 = 10292

Question 12

Accounting

Answer 12

Payable = Credit

Expense = Debit

Withheld = Credit

Question 13

Form 944 - Annual

Answer 13

Employer’s who have a payroll tax liability of up to $1000 in a calendar year must file Form 944

Question 14

Tax Liability $100k and over

Answer 14

If an employer’s tax liability reaches $100,00 on any day, no matter the deposit schedule, the liability must be deposited on the next business day.

Question 15

Semiweekly Tax Depositors

Tax Liability

Answer 15

Wages paid on Wednesday, Thursday, Friday - must be paid the following Wednesday

Wages paid on Saturday, Sunday, Monday, Tuesday - taxes must be paid the following Friday

Question 16

Monthly Tax Depositors

Tax Liability

Answer 16

Deposit taxes by the 15th of the following month

Question 17

Priorities of Withholding Orders

Answer 17

Child Support Orders 
Federal Tax Levy (1st unless a child support order is already in place)
Bankruptcy Orders 
Federal administrative garnishments
Student loan garnishments
State tax levies
Local tax levies
Creditor Garnishments

Question 18

Child Support Orders

Answer 18

Maximum amount to withhold
If current:
50% of disposable earnings of the employee is supporting another spouse/children
60% of disposable earnings if the employee is not supporting another spouse/children

If at least 12 weeks late on payments:
55% of the employee’s disposable earnings if the employee is supporting another spouse/children
65% of the employee’s disposable earnings if the employee is not supporting another spouse/children