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Exam 3: Social Security Taxes

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Question 21

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The Federal Insurance Contributions Act levies a tax upon the gross earnings of self-employed persons.

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Question 22

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FICA defines all of the following as wages except:

A) year-end bonuses.
B) standby payments.
C) total cash tips of $15 received by a tipped employee in May.
D) employees' social security taxes paid for by the employer.
E) first six months of sick pay.

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Question 23

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On Form 941, the employer does not show the date of each tax deposit during the quarter.

Form 941 is due on or before the 15th day of the month following the close of the calendar quarter for which the return is made.

The Social Security Act requires workers to obtain a new account number each time they change jobs.

A monthly depositor is one who reported employment taxes of $50,000 or more for the four quarters in the lookback period.

Barr fails to make a timely deposit of FICA taxes and withheld income taxes until five days after the due date.The penalty facing Barr is:

Employees may use Form 4070 to report the amount of their tips to their employers.

FICA does not consider the first six months of sick pay as taxable wages.

If an employee, who works two or more separate jobs, pays OASDI taxes on wages in excess of the taxable wage base, the employee is entitled to a refund of the overpayment.

Employees are liable for their FICA taxes only until the taxes have been collected from their pay by their employer.

In computing their own FICA taxes, employers may exclude the total amount of tips reported to them by their tipped employees.

Under SECA, all of an individual's self-employment income is counted in determining the HI tax.

Ashe, an employer, has made timely deposits of FICA taxes and withheld income taxes during the first quarter of 2016.The latest date on which she may file Form 941 is:

The highest paid executives of a firm are excluded from coverage under the Federal Insurance Contributions Act (FICA).

Employers do not pay payroll taxes on payments made to independent contractors.

The Social Security Act does not require self-employed persons to have an account number.

Dismissal pay is considered taxable wages under FICA.

The FICA tax rates for the self-employed are:

In its definition of employee, FICA clearly distinguishes between classes or grades of employees.