Questions Flashcards
How long to keep I-9 Forms
Retain for 3 years form date of hire or 1 year from termination, whichever is LATER
When should an I-9 be filled out
Employee must complete section 1 by 1st day of work
With in 3 business days t, employer reviews and completes Section 2
When reverifying, employer completes Section 3
IRS Penalties for Noncompliance
Civil:
1st Offense- $573- 4,586
2nd Offense-$4,586 - 11,463
More than two - 6,878 - 22,927
Criminal:
Failure to comply with verification - $230 - 2,292
Pattern and practice of violating requirements - Up to 3,000 and/or 6 months in jail
Social Security % and Limits
6.20% on all income up to $137,000.
The most you can pay in Social Security taxes for 2020 is $8,537.40.
What are taxes included in FICA?
FICA taxes include Social Security and Medicare taxes with employer rates of 6.2% and 1.45%, respectively.
FICA taxes are typically due monthly or semiweekly, and Form 941 is due quarterly.
What is due by January 31st
- File Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. However, if you deposited all of the FUTA tax when due, you have 10 additional calendar days to file.
- File Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees if you paid wages to one or more farmworkers and the wages were subject to social security and Medicare taxes or federal income tax withholding under the Form 944, Employer’s Annual Federal Tax Return, for the previous calendar year instead of Form 941 if the IRS has notified you in writing to File Form 944.
- File Form 945, Annual Return of Withheld Federal Income Tax, to report any nonpayroll income tax withheld in the previous year. If you deposited all taxes when due, you have 10 additional calendar days to file. See Nonpayroll Income Tax Withholding under Reminders in Publication 15 for more information.
- File Copy A of all paper Forms W-2, Wage and Tax Statement, with Form W-3, Transmittal of Wage and Tax Statements, or file electronic Forms W-2, with the Social Security Administration (SSA) to report wages, tips and other compensation paid to an employee. For information on reporting Form W-2 information to the SSA electronically, visit the SSA Employer W-2 Filing Instructions & Information Web page. See SSA Publication No. 42-007 for help in electronically filing Forms W-2.
- File Copy A of paper, Form 1099, Miscellaneous Income, with Form 1096, Annual Summary and Transmittal of U.S. Information Returns, or file electronic Forms 1099, Miscellaneous Income with the IRS, when you are reporting non-employee compensation payments in box 7. See IRS Publication 1220 (PDF) for help in electronically filing Forms 1099.
When to file Form 940
by January 31st, April 30th, July 31st and October 31st.
What is due by February 28th
File Copy A of paper Form 1099, other than those with entries in box 7, (see By January 31 above,) with Form 1096, Annual Summary and Transmittal of U.S. Information Returns, with the IRS. For electronically filed returns, see By March 31 below.
File paper Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, with the IRS. See section 6 of Publication 15. For electronically filed returns, see By March 31 below.
What is due by March 31
File electronic Form 1099, other than those with entries in box 7, (see By January 31 above,)
and electronic Form 8027 with the IRS. (See Publication 1220 for help in electronically filing Forms 1099 and Publication 1239 (PDF) for help in electronically filing Forms 8027.)
When to deposit FUTA
FUTA tax by the last day of the first month that follows the end of the quarter. If the due date for making your deposit falls on a Saturday, Sunday, or legal holiday, you may make your deposit on the next business day.
If your liability for the fourth quarter (plus any undeposited amount from any earlier quarter) is over $500, deposit the entire amount by the due date of Form 940 (January 31). If it is $500 or less, you can make a deposit, pay the tax with a credit or debit card, or pay the tax with your Form 940 by January 31.
What is on a 940 Form
Employer’s Annual Federal Unemployment (FUTA) Tax Return
An employee is provided a parking space on the
employer’s premises. The FMV of the space is $200. This
is referred to as a:
A. De minimis fringe benefit.
B. Qualified transportation fringe benefit.
C. No-additional-cost fringe benefit.
D. Qualified employee discount.
B. Qualified transportation fringe benefit.
A nonexempt employee is paid $9.50 per hour and
recorded the following hours:
Sun Mon Tues Wed Thurs Fri Sat
0 (sick) 10 8 8 8 0
Company policy allows pay for sick days at 8 hours per
day. Under the FLSA, calculate the employee’s gross
weekly pay.
A. $323.00
B. $399.00
C. $408.50
D. $418.00
B. $399.00
What types of wages are excluded when calculating the
regular rate?
A. Production bonus.
B. Shift differential.
C. Paid time not worked.
D. Premium pay less than one and one-half times the
base rate.
C. Paid time not worked.
When setting up a new payroll system, testing is part of: A. RFP preparation. B. Needs analysis. C. Implementation. D. Evaluation. 5. Pre-tax contributions
C. Implementation.
Pre-tax contributions to a cafeteria plan for medical
insurance are exempt from:
A. Social security, Medicare, FIT, and FUTA only.
B. Social security, Medicare, and FIT only.
C. Social security, Medicare, and FUTA only.
D. FIT and FUTA only.
A. Social security, Medicare, FIT, and FUTA only.
In a state that is not credit reduction, an employee’s
current pay is $1,300.00. YTD wages are $5,895.00.
Calculate the FUTA tax the employer must accrue if all
taxes are paid timely and in full.
A. $6.63
B. $7.80
C. $66.30
D. $78.00
A. $6.63
5895+1300=7195
Only tax up to 7000 so
1300-195=1105
1105*.6%=6.63
Non-employee compensation is not reported to the IRS if the payments are less than: A. $600.00 in the calendar year. B. $600.00 in any 12-month period. C. $1,000.00 in the calendar year. D. $1,000.00 in any 12-month period.
A. $600.00 in the calendar year.
All of the following duties should be included in the job
description of a payroll department employee EXCEPT:
A. Data entry of payroll input.
B. Reviewing source documents for proper authorization.
C. Reconciliation of payroll bank accounts.
D. Distribution of payroll-related reports.
C. Reconciliation of payroll bank accounts.
Taxes advanced by an employer on behalf of employees
must be recovered from employees by no later than:
A. January 1 of the following year.
B. January 31 of the following year.
C. March 31 of the following year.
D. April 1 of the following year.
D. April 1 of the following year.
All of the following accounts are asset accounts EXCEPT: A. Cash. B. Accounts receivable. C. Inventory. D. Accounts payable.
D. Accounts payable.
Child Labor Restrictions
Under 14- Generally forbidden from working, except family farms
14 and 15- food service, bag and carry out, office and clerical, cashier, clean-up
work hours:
In school: 7am-7pm 3 hours per day 18 hours per week
Out of School: 7am -9pm No more than 8 hours per day, 40 hours per week
16 and 17- Any with the exception of hazardous jobs no hour limitations
Penalties for failure to pay minimum wage and/or overtime
- Recovery of back wages & equal damages
- Repeated willful violations up to $2,050 per violation
Federal minimum wage
$7.25 per hour
Opportunity wage $4.25 first 90 calendar day just learning and under 20