FPC Certification Exam Questions
with 100% Correct Answers
What is included on form 1099-MISC? - Answer-Form 1099-MISC states how much the
contractor was paid for services rendered during the past calendar year. A copy of this
form must also be sent to the Internal Revenue Service (IRS).
When must an employer provide a contractor with a 1099-MISC? - Answer-when paying
the contractor $600 or more during the calendar year and at the end of the year.
To satisfy the Reasonable Basis test and treat a worker as an independent contractor, a
company can rely on all of the following methods EXCEPT:
A. a private letter ruling issued to another company in the same industry indicating
similarly situated workers are independent contractors.
B. showing at least 25% of its industry treats similarly situated workers as independent
contractors.
C. information from published IRS rulings.
D. a private letter ruling issued to the company indicating the worker is an independent
contractor. - Answer-A. a private letter ruling issued to another company in the same
industry indicating similarly situated workers are independent contractors.
How frequently does federal law require master files to be updated? - Answer-There are
no federal requirements for frequency of updates
FUTA taxes of more than $500.00 on wages paid in the first quarter must be deposited
by when? - Answer-April 30th
Under FLSA, a record of employees must be retained for how long? - Answer-Two
years
TRUE or FALSE: Under deposited payroll tax liability is subject to penalties for late
deposit even if corrected within five days. - Answer-TRUE
Under FLSA white collar exemption rules, an exempt executive employee must meet
the following criteria: - Answer-Managing a recognized department, Directing the work
of two or more full time employees, Being paid a weekly salary of at least $455.00.
In what order does an employee need to withhold deductions for health insurance and
union dues? - Answer-Any order the employee chooses
, What is Form SS-8 - Answer-Determination of Worker for purposes of federal
employment taxes and income tax withholding.
Reasonable Basis Tests (Safe Harbor Rules) - Answer-Court decisions, published IRS
rulings, IRS technical advice sent to the employer, or a private letter ruling from the IRS
to the employer indicating that the worker is not an employee
A past IRS audit of the employer that did not result in a finding of taxes owed or a
penalty attributable to the employer's treatment of the worker as an independent
contractor (audits occurring after December 31, 1996, may not be relied on unless they
include an employment classification audit of the worker involved or the audit of a
similarly situated worker)
Guidance from an attorney or CPA who know the business
A long-standing, recognized practice in a significant segment of the employer's industry
of treating workers in similar situations as independent contractors
Where is reasonable basis defined in IRS tax code? - Answer-Safe Harbor Rules are
defined under the Revenue Act of 1978.
T/F: If a Form W-2, Wage and Tax Statement was filed for the worker or if the worker
received benefits under the employer's benefit plans, the worker is classified as an
employee. - Answer-True
Common Law Test for determining whether a worker is an independent contractor? -
Answer-Sets own hours, determines own sequence of work
Can work for multiple employers, services available to the public
Is self Employed
A contract governs how the relationship can be severed
Works by the job
Permitted to employ assistants
Performs services under the workers business name
Payment by the job; opportunity for profit and loss
Furnishes own tools, equipment and training; substantial investment by worker
Controls the sales process and terms
What can discriminate in favor of highly compensated employees? - Answer-non
qualified deferred compensation plans
What is the 2016 maximum taxable wage for medicare. - Answer-No maximum taxable
medicare wage
HIPPA sets standards for the protection of - Answer-Health Information
To calculate the maximum amount to withhold for child support , an employer uses the
employee's - Answer-disposable pay
with 100% Correct Answers
What is included on form 1099-MISC? - Answer-Form 1099-MISC states how much the
contractor was paid for services rendered during the past calendar year. A copy of this
form must also be sent to the Internal Revenue Service (IRS).
When must an employer provide a contractor with a 1099-MISC? - Answer-when paying
the contractor $600 or more during the calendar year and at the end of the year.
To satisfy the Reasonable Basis test and treat a worker as an independent contractor, a
company can rely on all of the following methods EXCEPT:
A. a private letter ruling issued to another company in the same industry indicating
similarly situated workers are independent contractors.
B. showing at least 25% of its industry treats similarly situated workers as independent
contractors.
C. information from published IRS rulings.
D. a private letter ruling issued to the company indicating the worker is an independent
contractor. - Answer-A. a private letter ruling issued to another company in the same
industry indicating similarly situated workers are independent contractors.
How frequently does federal law require master files to be updated? - Answer-There are
no federal requirements for frequency of updates
FUTA taxes of more than $500.00 on wages paid in the first quarter must be deposited
by when? - Answer-April 30th
Under FLSA, a record of employees must be retained for how long? - Answer-Two
years
TRUE or FALSE: Under deposited payroll tax liability is subject to penalties for late
deposit even if corrected within five days. - Answer-TRUE
Under FLSA white collar exemption rules, an exempt executive employee must meet
the following criteria: - Answer-Managing a recognized department, Directing the work
of two or more full time employees, Being paid a weekly salary of at least $455.00.
In what order does an employee need to withhold deductions for health insurance and
union dues? - Answer-Any order the employee chooses
, What is Form SS-8 - Answer-Determination of Worker for purposes of federal
employment taxes and income tax withholding.
Reasonable Basis Tests (Safe Harbor Rules) - Answer-Court decisions, published IRS
rulings, IRS technical advice sent to the employer, or a private letter ruling from the IRS
to the employer indicating that the worker is not an employee
A past IRS audit of the employer that did not result in a finding of taxes owed or a
penalty attributable to the employer's treatment of the worker as an independent
contractor (audits occurring after December 31, 1996, may not be relied on unless they
include an employment classification audit of the worker involved or the audit of a
similarly situated worker)
Guidance from an attorney or CPA who know the business
A long-standing, recognized practice in a significant segment of the employer's industry
of treating workers in similar situations as independent contractors
Where is reasonable basis defined in IRS tax code? - Answer-Safe Harbor Rules are
defined under the Revenue Act of 1978.
T/F: If a Form W-2, Wage and Tax Statement was filed for the worker or if the worker
received benefits under the employer's benefit plans, the worker is classified as an
employee. - Answer-True
Common Law Test for determining whether a worker is an independent contractor? -
Answer-Sets own hours, determines own sequence of work
Can work for multiple employers, services available to the public
Is self Employed
A contract governs how the relationship can be severed
Works by the job
Permitted to employ assistants
Performs services under the workers business name
Payment by the job; opportunity for profit and loss
Furnishes own tools, equipment and training; substantial investment by worker
Controls the sales process and terms
What can discriminate in favor of highly compensated employees? - Answer-non
qualified deferred compensation plans
What is the 2016 maximum taxable wage for medicare. - Answer-No maximum taxable
medicare wage
HIPPA sets standards for the protection of - Answer-Health Information
To calculate the maximum amount to withhold for child support , an employer uses the
employee's - Answer-disposable pay
