Solution Manual for Payroll Accounting 2024, 34th Edition by
Bernard J. Bieg, Bridget Stomberg, Verified Chapters 1 - 7,
Complete Newest Version
FICA Act - ANSWER: Imposes two taxes on employee and two taxes on employers.
FICA (OASDI) and Medi (HI).
What does FICA stand for? - ANSWER: Federal Insurance Contribution
What is OASDI? - ANSWER: Finances the federal old-age, survivors, and disability
insurance program
What does HI stand for? - ANSWER: Hospital insurance. Or Medicare program
FICA Act funds what programs? - ANSWER: OASDI and HI
SECA Act - ANSWER: Levies a tax upon the net earnings of the self-employed.
Coverage under FICA is determined by: - ANSWER: *If the individual is an employee
*If the service the individual renders is "employment"
*If the compensation the individual receives is "taxable wages"
Employer - ANSWER: Controls or directs employees under either applied or
expressed contract of employment and pays wages or salaries in compensation.
Employee - ANSWER: A business has the right to tell a worker how, when, and where
to work
Occupations Specifically covered by FICA - ANSWER: *Agent-drivers and commission-
drivers
Full-time Life Insurance salespersons
Full-time Traveling or city salesperson for one firm or person
Individual who works at home on materials, or goods that you supply and that must
be returned to you, or gives specifications for the work.
What are some exempt employment types for FICA coverage? - ANSWER: *Services
preformed by civilians for the government,if those services are covered by a
retirement system.
*Services performed by students as in a "non-career" employment for their public,
school, or colleges
*Services performed by student nurses for undergraduates with at least 6 credit
hours.
Family Employment - ANSWER: Work performed for a parent by a child under the
age of 18 is exempt from FICA.
, Independent Contractor - ANSWER: Persons who follow an independent trade,
business or profession where they offer their services to the public.
Family Employment-2 - ANSWER: Under 21 that does not work for parents business
are exempt from FICA
Independent Contractor-2 - ANSWER: Employers do not pay or withhold payroll
taxes on payment made to these..
Federal Government employees - ANSWER: Hired after 1983- Full coverage
Hired prior to 1984-only Medicare (HI) applies
State and Local employees - ANSWER: Work done after July 1, 1991 and covered by a
public retirement plan-full coverage.
Hired after March 31, 1986, covered by a public retirement plan- Medicare (HI) only.
Military - ANSWER: Basic pay- Full FICA Taxes
Excess of basic pay- Not subject to FICA tax
Taxable wages - ANSWER: The amount of wages paid by employers to their
employees during the calendar year determines the amount of OASDI/HI taxes.
Wages Include - ANSWER: Actual money received by employees.
Cash value of meals and lodging provided for the convenience of the employees.
Bonuses and commissions paid by the employer with respect to employment.
Examples of taxable wages - ANSWER: Back-pay awards
Dismissal pay
Fringe benefits-non cash
Jury duty and vacation pay
Tips - ANSWER: FICA considers cash tips of $20 or more in a calender month to be
taxable.
Form 4070 - ANSWER: Employee's Report of Tips to employer. Employees must
report their tips by the 10th of the month following the tips received.
Employer ("Tip") deducts FICA from what kind of wages? - ANSWER: Regular wages
and tip income
Form 8846 - ANSWER: Is the form tip employers use to take a FICA tax credit on tip
income.
Large food and beverage establishments (11 or more employees) - ANSWER:
Required to allocate to their tipped employees the excess of 8% of the
establishments gross receipts over the tips actually reported by their employees.
Bernard J. Bieg, Bridget Stomberg, Verified Chapters 1 - 7,
Complete Newest Version
FICA Act - ANSWER: Imposes two taxes on employee and two taxes on employers.
FICA (OASDI) and Medi (HI).
What does FICA stand for? - ANSWER: Federal Insurance Contribution
What is OASDI? - ANSWER: Finances the federal old-age, survivors, and disability
insurance program
What does HI stand for? - ANSWER: Hospital insurance. Or Medicare program
FICA Act funds what programs? - ANSWER: OASDI and HI
SECA Act - ANSWER: Levies a tax upon the net earnings of the self-employed.
Coverage under FICA is determined by: - ANSWER: *If the individual is an employee
*If the service the individual renders is "employment"
*If the compensation the individual receives is "taxable wages"
Employer - ANSWER: Controls or directs employees under either applied or
expressed contract of employment and pays wages or salaries in compensation.
Employee - ANSWER: A business has the right to tell a worker how, when, and where
to work
Occupations Specifically covered by FICA - ANSWER: *Agent-drivers and commission-
drivers
Full-time Life Insurance salespersons
Full-time Traveling or city salesperson for one firm or person
Individual who works at home on materials, or goods that you supply and that must
be returned to you, or gives specifications for the work.
What are some exempt employment types for FICA coverage? - ANSWER: *Services
preformed by civilians for the government,if those services are covered by a
retirement system.
*Services performed by students as in a "non-career" employment for their public,
school, or colleges
*Services performed by student nurses for undergraduates with at least 6 credit
hours.
Family Employment - ANSWER: Work performed for a parent by a child under the
age of 18 is exempt from FICA.
, Independent Contractor - ANSWER: Persons who follow an independent trade,
business or profession where they offer their services to the public.
Family Employment-2 - ANSWER: Under 21 that does not work for parents business
are exempt from FICA
Independent Contractor-2 - ANSWER: Employers do not pay or withhold payroll
taxes on payment made to these..
Federal Government employees - ANSWER: Hired after 1983- Full coverage
Hired prior to 1984-only Medicare (HI) applies
State and Local employees - ANSWER: Work done after July 1, 1991 and covered by a
public retirement plan-full coverage.
Hired after March 31, 1986, covered by a public retirement plan- Medicare (HI) only.
Military - ANSWER: Basic pay- Full FICA Taxes
Excess of basic pay- Not subject to FICA tax
Taxable wages - ANSWER: The amount of wages paid by employers to their
employees during the calendar year determines the amount of OASDI/HI taxes.
Wages Include - ANSWER: Actual money received by employees.
Cash value of meals and lodging provided for the convenience of the employees.
Bonuses and commissions paid by the employer with respect to employment.
Examples of taxable wages - ANSWER: Back-pay awards
Dismissal pay
Fringe benefits-non cash
Jury duty and vacation pay
Tips - ANSWER: FICA considers cash tips of $20 or more in a calender month to be
taxable.
Form 4070 - ANSWER: Employee's Report of Tips to employer. Employees must
report their tips by the 10th of the month following the tips received.
Employer ("Tip") deducts FICA from what kind of wages? - ANSWER: Regular wages
and tip income
Form 8846 - ANSWER: Is the form tip employers use to take a FICA tax credit on tip
income.
Large food and beverage establishments (11 or more employees) - ANSWER:
Required to allocate to their tipped employees the excess of 8% of the
establishments gross receipts over the tips actually reported by their employees.
