Question : 31. Which of the following amounts paid by an employer to : 1313603

31. Which of the following amounts paid by an employer to an employee is not subject to withholding?

a. Commissions

b. Travel expense reimbursements from an accountable plan

c. Salary

d. Bonus

e. All of the above are subject to withholding

32. Mark the incorrect answer. In completing W-4s, employees may claim extra allowances:

a. If they are paying alimony.

b. If they have tax credits.

c. If they expect to have large amounts of itemized deductions.

d. If they have high levels of interest and dividend income.

33. Payors are not required to use backup withholding if:

a. The taxpayer did not give the payor his or her taxpayer identification number.

b. The taxpayer certifies that he or she is not subject to backup withholding.

c. The IRS informs the payor that the taxpayer gave an incorrect identification number.

d. The IRS informs the payor to start withholding because the taxpayer has not reported the income on his or her tax return.

34. Steve is a single man who lives by himself. He has one job as a computer tech. How many withholding allowances can he claim?

a. 2

b. 3

c. 5

d. 10

e. He can claim any number of withholding allowances that he believes will leave him with proper withholding.

35. Mark the incorrect answer. Estimated income tax payments:

a. Need not be filed if the estimated tax, after subtracting withholding, can reasonably be expected to be more than $1,000.

b. If inadequate, may result in nondeductible penalties.

c. May be based on the amount of the tax liability for the prior year.

d. Are made in four installments on April 15, June 15, and September 15 of the tax year and on January 15 of the following year.

36. Which of the following taxpayers are not required to make estimated payments?

a. A car mechanic who is self-employed and earns $50,000 a year.

b. A wealthy individual whose earnings are from corporate dividends.

c. An employee who works at a local department store with appropriate withholding and no other income.

d. All of the above must make estimated payments.

37. For 2014, the maximum base for the Social Security portion of the FICA tax is:

a. $135,000

b. $117,000

c. $87,900

d. $84,000

e. None of the above

38. Mark the correct answer. FICA taxes are:

a. 7.65 percent of all earned income with no limitations.

b. 7.65 percent of earned income up to $150,000.

c. Paid by the employee and by the employer.

d. Not subject to cost of living adjustments each year.

39. For 2014, the Social Security portion of the FICA tax is imposed at a rate of:

a. 6.2 percent for the employee and 7.65 percent for the employer.

b. 6.2 percent for only the employer.

c. 6.2 percent for only the employee.

d. 6.2 percent for the employee and 6.2 percent for the employer.

e. None of the above.

40. Elwin worked at three jobs during 2014. He earned $30,000, $27,000, and $9,000, respectively, from the jobs. What is the total amount of FICA tax that would have been withheld from Elwin’s wages?

a. $4,054.80

b. $4,092.00

c. $5,003.10

d. $5,049.00

e. None of the above