Test Bank For Payroll Accounting 2016 26th Edition by Bieg

Test Bank For Payroll Accounting 2016 26th Edition by Bieg

1. The Federal Insurance Contributions Act levies a tax up on the gross earnings of self-employed persons.
a.  True
b.  False
ANSWER:   False
POINTS:   1

2. FICA includes partnerships in its definition of employer.
a.  True
b.  False
ANSWER:   True
POINTS:   1

3. In its definition of employee, FICA clearly distinguishes between classes or grades of employees.
a.  True
b.  False
ANSWER:   False
POINTS:   1

4. The highest paid executives of a firm are excluded from coverage under the Federal Insurance Contributions Act (FICA).
a.  True
b.  False
ANSWER:   False
POINTS:   1

5. A worker hired by the federal government in 2016 is covered under FICA.
a.  True
b.  False
ANSWER:   True
POINTS:   1

6. Employees of a state government hired before January 1, 1986, and covered by a public retirement plan, are exempt from FICA coverage.
a.  True
b.  False
ANSWER:   True
POINTS:   1

7. Peter, age 17 and employed by his family-owned corporation, is covered under FICA.
a.  True
b.  False
ANSWER:   True
POINTS:   1

8. Employers do not pay payroll taxes on payments made to independent contractors.
a.  True
b.  False
ANSWER:   True
POINTS:   1

9. Dismissal pay is considered taxable wages under FICA.
a.  True
b.  False
ANSWER:   True
POINTS:   1

10. Under FICA only, cash tips of more than $100 in a month are defined as taxable wages.
a.  True
b.  False
ANSWER:   False
POINTS:   1

11. Employees may use Form 4070 to report the amount of their tips to their employers.
a.  True
b.  False
ANSWER:   True
POINTS:   1

12. FICA does not consider the first six months of sick pay as taxable wages.
a.  True
b.  False
ANSWER:   False
POINTS:   1

13. In computing their own FICA taxes, employers may exclude the total amount of tips reported to them by their tipped employees.
a.  True
b.  False
ANSWER:   False
POINTS:   1

14. FICA defines wages as including the cash value of meals provided for the convenience of the employees.
a.  True
b.  False
ANSWER:   True
POINTS:   1

15. Payments made to a worker’s spouse for hospital expenses in connection with an accident disability are not considered wages under FICA.
a.  True
b.  False
ANSWER:   True
POINTS:   1

16. Employer payments made directly to employees in lieu of health insurance coverage are taxable wages.
a.  True
b.  False
ANSWER:   True
POINTS:   1

17. Exempt educational assistance includes payments for tools that employees keep after they complete a course of instruction.
a.  True
b.  False
ANSWER:   False
POINTS:   1

18. Each year, the FICA (OASDI portion) taxable wage base is automatically adjusted whenever a cost of living raise in social security benefits becomes available.
a.  True
b.  False
ANSWER:   True
POINTS:   1

19. The FICA tax rates and taxable wage bases are exactly the same for the employee and employer when the employee makes $200,000 or less.
a.  True
b.  False
ANSWER:   True
POINTS:   1

20. Employees are liable for their FICA taxes only until the taxes have been collected from their pay by their employer.
a.  True
b.  False
ANSWER:   True
POINTS:   1