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85 Cards in this Set
- Front
- Back
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What is the Medical FSA limit? |
$2,700 |
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What is a cafeteria plan? |
A cafeteria plan meeting IRC section 125 requirements allows employers to select a menu of generally non-taxable benefits offered to employees |
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What taxes are paid on qualified retirement plans? |
Employee contributions to qualified retirement plans are not subject to federal income tax but are subject to FICA. Employer contributions are nontaxable. |
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What is the 401(k) deferral limit? |
The annual limit is $19,000. Employees age 50+ may make additional catch-up contributions of $6,000. |
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What taxes are Roth 401(k) contributions subject to? How is it reported on the W-2? |
Federal income tax and FICA. Reported on W-2 in box 12 with code AA |
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What are 457(b) plans for? |
Public sector employers (state & local governments) |
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How are 401(k) contributions reported? |
On form W-2 in box 12 with code D |
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What taxes are withheld from tips? |
The IRS defines priority for tax withholding as FICA first then income tax |
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What is the commuting valuation rate? |
The rate for personal use is $1.50 per trip or $3.00 per day |
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What is the federal business standard mileage rate? |
$0.58 per mile |
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What taxes are withheld from GTL? |
FICA |
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How are allocated tips reported? |
Allocated tips are calculated on form 8027 and on W-2 on box 8 |
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What is the monthly limit for transportation benefits? |
$265 per month |
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When must an employer implement an updated W-4 provided by the employee? |
The employer must implement the new W-4 no later than the first payroll period ending on or after the 30th day. |
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When do monthly depositors have to submit their payroll tax liability? |
A monthly depositor must deposit its tax liability by the 15th of the following month. If the 15th is on a weekend/holiday, it is due the next business day. |
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Under the FLSA, what documents must be retained for at least 2 years? |
Wage rate tables |
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How long must an employer retain an employee's prior W-4? |
4 years after the last tax return was filed using the information on the W-4. |
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What penalties are assessed if a company files paper forms W-2 with the SSA after the deadline? |
Returns not filed timely, with correct info, or the correct format are subject to 3-tier penalty: $50/return if corrected by Mar 2; $110/return if corrected Mar 3 - Aug 1; & $270/return if corrected after Aug 1 |
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When must an employee submit a new W-4? |
When their change in status requires more income tax to be withheld |
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What is form 945? |
Annual Return of Federal Withheld Income Tax which reports income tax withheld from nonpayroll payments including qualified pensions, gambling winnings, and payments subject to backup withholding. |
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What is form 941 used to report? |
Wages subject to income, social security & Medicare tax as well as tax deposits and liabilities. |
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Form SS-5 is used for what? |
To obtain a new social security card or have a card reissued. |
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What is the penalty for a deposit made more than 5 days but not more than 15 days after the due date? |
5% of the deposit |
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What is the Social Security wage limit? |
$132,900 |
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If a Semiweekly Depositor issues pay on Saturday, Sunday, Monday or Tuesday; when is the deposit due? |
The following Friday |
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If a Semiweekly Depositor issues pay on Wednesday, Thursday or Friday; when is the deposit due? |
The following Wednesday |
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What is the IRS fuel rate? |
$0.055 per mile |
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What is considered a workweek under the FLSA? |
A workweek consists of 7 consecutive 24 hour periods or 168 hours |
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What is the maximum creditor garnishment? |
25% of disposable earnings or the amount by which the employee's weekly disposable earnings exceeds 30x the minimum wage. |
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What is the maximum Federal Agency or Student Loan Garnishment deduction? |
Under the DCIA, the maximum garnishment deduction is 15% of disposable earnings or the amount by which the weekly disposable earnings exceed 30x the minimum wage |
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What is the maximum child support deduction? |
The maximum child support deduction is 50% or 60% depending on the employees family status and 55% or 65% if garnishment is in arrears |
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How does imputing income affect an employee's net pay? |
Imputing income reduces net pay by increasing taxes. |
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Salaries earned but not yet paid in the current month must be recorded as what? |
It must be recorded with a journal entry debiting salary expense and crediting accrued salaries payable |
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What happens if an employer fails to make all state unemployment contributions by the form 940 due date? |
Employers lose 10% of the normal 5.4% FUTA tax credit |
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What are internal controls? |
Internal controls are designed to safeguard a company's assets & ensure financial statements are not misstated. Internal controls include edits, balancing and reconciling. |
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What is a general ledger? |
It is a record of business transactions by account. Journal entries are posted to the GL. Financial statements are prepared from the general ledger. |
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What is an asset? |
An asset is anything of value that provides economic benefits or value to an organization over a period of time. Assets may be current, property, or intangible. |
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What is a liability? |
Liabilities are the organization's debts that have not been paid. Liabilities represent claims against the organization's assets. Liabilities are current (paid in a year) or long-term. |
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What is a journal entry? |
A journal entry is the record of the daily transactions of a business. Every journal entry recorded equals debits and credits. |
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What is equity? |
Equity represents an owner's investment in the company consisting of contributed capital and retained earnings. |
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What is revenue? |
Revenue is the amount received for the sale of the organization's products or services. Revenue can be recognized by the receipt of cash or a promise to pay in the future. |
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What is a balance sheet? |
A balance sheet is the record of the organization's assets, liabilities, and equity at a point in time. The balance sheet formula is: assets = liabilities + equity |
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What form stops a tax levy deduction? |
Form 668-D |
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What is the FIRE system? |
The fire system is the IRS filing information returns electronically system used to file forms 1099. |
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What is box 5 on form W-2 for? |
Wages subject to Medicare tax |
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What is form 944? |
Employer's Annual Federal Tax Return, can be used by employers with an annual tax liability of $1,000 or less to report wages, FIT, social security and Medicare wages and tax deposits. |
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What is the FUTA rate? |
0.6% for employers who have paid all SUTA taxes timely and are not in a state with credit reduction. |
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What is the FUTA tax credit? |
Employers paying state unemployment taxes timely can get a FUTA tax credit maximum of 5.4%. The credit may be reduced due to states in credit reduction status. |
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What is EFTPS? |
EFTPS is the IRS electronic Federal Tax Payment System for making tax deposits. Employers, except those with a tax liability of $2,500 or less in the current or prior quarter, are required to use EFTPS. |
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How are employment-related wages excluded from FUTA tax reported on form 940? |
Payments excluded from FUTA are reported on the 940, part 2, line 4, payments exempt from FUTA tax. |
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What is reported on the W-2 under box 12 with Code N? |
Uncollected medicare tax on group-term life insurance. |
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What is reported on form W-2 box 15? |
Box 15 is used to report the state and state tax ID |
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What is reported on form W-2 box 11? |
Box 11 is used to report non-qualified plans deferrals or distributions |
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What is reported on form W-2 box 10? |
Box 10 is used to report dependent care benefits |
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What is the penalty for an organization depositing tax liabilities 5 days after the due date? |
2% of the amount deposited late |
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Form 940, part 2, line 3, total payments to all employees reports what type of wages? |
Total payments |
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Under the FLSA, how many hours can 14 & 15 year olds work? |
14 and 15 year olds can only work 3 hours per day and 18 hours per week while school is in session. They cannot work during school hours. |
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Who has the responsibility to verify the eligibility to work in the U.S.? |
Employer |
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When school is not in session, what hours can 14 & 15 year olds work? |
Can only work between 7 A.M. and 9 P.M. |
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When school is in session, how many hours can 14 & 15 year olds work? |
Can only work between 7 A.M. & 7 P.M. and not during school hours |
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How long must an employer retain tax related documents, such as returns and amount and date of employee's wage payments? |
4 years |
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What is the FUTA tax rate when an employer is not eligible for FUTA tax credits? |
6.0% |
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Electronic tax deposits may be submitted using which methods? |
Primary options are EFTPS-Direct which is an ACH debit entry, & EFTPS-Through a financial institution, which is an ACH credit entry. Electronic Tax Application is a subsystem of EFTPS in which deposits are made the same day they are initiated. |
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How is dependent care FSA taxed? |
It is non-taxable |
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How often are employers required to report the value of the personal use of a vehicle? |
At least once a year |
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In journal entries, debits increase or decrease? |
Debits increase expenses |
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In a journal entry, what do credits do? |
Credits increase liabilities & decrease assets |
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Under FSA rules, the uniform coverage provisions only applies to what? |
A health care plan |
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When a company always makes timely tax deposits, its 1st quarter form 941 is due when? |
It is due on or before May 10th due to an automatic 10 day extension applied for timely deposits |
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What is the 2019 annual compensation limit for defined benefit & contribution plans? |
$280,000 |
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How is GTL in excess of $50,000 reported on the W-2? |
Box 12(Code C) |
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What is form 941, Schedule B used to record? |
Daily liabilities within the quarter |
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What is form 1094-C? |
Transmittal of Employer Provided Health Insurance Offer & Coverage Information Return |
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How long must form I-9 be retained? |
The later of 3 years after hire date or 1 year after date of termination |
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How long must hours worked each day/week be retained? |
Under the FLSA, the record of hours worked must be retained for at least 3 years after date of last entry |
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What is RDFI? |
Receiving Depository Financial Institution |
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What is escheat? |
The process of transferring abandoned wages to the appropriate state agency |
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What is O D F I? |
Originating Depository Financial Institution |
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What is the gross-up formula? |
Divide the desired net pay by 100% less all of the employee's tax rates |
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Define imputed income |
Taxable value of noncash benefits the employee receives |
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How long must IRS, SSA & FUTA documents be retained? |
4 years |
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What is the primary purpose of batch controls? |
Validate entry accuracy |
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What plans are ineligible benefits in a cafeteria plan? |
403(b) & 457(b) |
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What is form 843 used for? |
To file abatement for assessed penalties, assessed interest and additions to taxes due |
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When a monthly depositor pays 98% of its tax liability timely, when must the remaining balance be paid? |
By the due date of the quarterly return |
