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Achievement Test Chapter 3
Achievement Test Chapter 3
True or False
1. A child working for his father’s corporation is not exempt from coverage under FICA.
2. Under FICA, each partner in a partnership is defined as an employee of that organization.
3. Part-time employees pay a FICA tax at half the tax rate of full-time employees.
4. Once a person reaches the age of 65, social security taxes are not taken out of his or her paycheck.
5. Year-end bonuses paid to employees are not subject to the hospital insurance (HI) part of the FICA tax.
6. Under FICA, employers must collect the employee’s FICA taxes on tips reported by each employee.
7. Employees and independent contractors pay different FICA tax rates.
8. Employer contributions for retirement plan payments for employees are defined as wages and are thus subject to FICA taxes.
9. If on any day during a deposit period an employer has accumulated $100,000 or more in undeposited employment taxes, the taxes must be deposited on the next banking day.
10. If an employee defers compensation into a 401(k) plan, the deferral (payroll deduction) is still subject to social security taxes.
11. Employers must withhold FICA taxes on payments that are made to independent contractors.
12. Self-employed persons who also work other jobs as employees do not have to pay any FICA taxes on their net self-employment earnings.
13. The requirements for depositing FICA taxes and income taxes withheld from employees’ wages vary according to the amount of such taxes reported during a “lookback period.”
14. A monthly depositor’s employment taxes total $3,800 on Wednesday, March 31, 20–, the end of the calendar quarter. The taxes should be deposited on or before the following Tuesday (April 6).
15. On payday, Friday, a semiweekly depositor has accumulated employment taxes totaling $13,900. The taxes should be deposited on or before the following Wednesday.
16. Employers who file Form 941 electronically are given an extra 10 days from the normal due date to make their deposits.
17. Once the initial Form 941 is filed by a company, the company does not need to file Form 941 for a quarter in which there are no taxes to report.
18. Every employer has the right to choose the method (electronic or paper coupon) of depositing employment taxes.
19. If the last day for filing Form 941 falls on Saturday, the return may be filed on the next business day.
20. If tax deposits are made on time, there is no penalty for late filing of Form 941.
21.