FPC
Finding the base FIT using Percentage Method: - ANS-
Finding the FIT on Supplemental Wages: Optional Fat Rate- - ANS-(Other compensation + any
reimbursement) x 25%,
Finding Social Security Tax: - ANS-Total Compensation x 6.2%
Finding Medicare Tax: - ANS-Total Compensation x 1.45%
Finding the net pay: - ANS-Total Compensation - Base FIT -Supplement FIT -Social Security
Tax- Medicare Tax -Reimbursements
Finding the FIT - ANS-Base pay - 401k-Section 125=Gross FIT...Number of allowances x
Amount per allowance= Allowance amount...Gross FIT compensation - Allowance amount =
Adjusted wages...Check the appropriate percentage table...Adjusted waged - Excess allowed =
Excess amount...Amount of tax + (% x Excess amount) = FIT withholding
- ANS-
Finding Soc Sec Tax: if YTD is under 118500 wages. - ANS-(Base pay - Sect 125 contrib) x
6.2%
Finding the medicare tax if YTD is under 200000 wages: - ANS-Base pay - Sect 125 x 1.45%
A nonexempt employee earns $10.00 per hour. Last week, the employee earned a production
bonus of $42.00 according to the union contract. The employee worked 44 hours last week.
Calculate the employee's gross pay for the week. - ANS-The correct answer is $503.91
Hours x rate
_____+ bonus =base
base/hours= regular rate of pay
RRP / 2 =OT rate
OT rate x OT hours= OT amount
OT amount + Base = answer
During an employee's qualified move, the employee drove 885 miles and submitted an expense
report to the employer in the amount of $698.88. Detailed on the expense report were $120.00
for hotel rooms for two nights, $70.00 in meals, and $508.88 for the mileage. Calculate the
taxable amount of the employee's moving expenses. - ANS-The correct answer is $375.33 (.575
x miles driven) - (.23 x miles driven) + meals= Answer
,During and employee's qualified move, the employee drove 1485 miles and submitted to the
employer the amount of $1,038.88. Detailed on the expense report were $120 for the hotel, $65
in meals and $853.88 for mileage. Calculate the taxable amount. - ANS-The correct answer is
577.33 (.575 x miles driven) - (.23 x miles driven) + meals= Answer
An employee died in March 2015, and is owed a $1200 supplemental bonus. The employee
total YTD compensation is 50000. Using Optimal Flat Rate method, calculate the total amount
of federal taxes to be withheld. - ANS-The answer is $91.80
Bonus x 7.65% = Answer ***FIT is NOT withheld***
A disadvantage of EFT compared to issuing paper checks is - ANS-the need for additional
information from the employee
An employer reimburses 100% of an employee's monthly parking space near the employee's
work site. The parking fees are $270 per month. Calculate the monthly taxable amount of the
parking reimbursement. - ANS-$20 Employer is taxed anything over $250
System generated audits trails may be limited due to: - ANS-System resources
An employee who meets the time test relocates 2400 miles away. The employer reimbursed all
expenses for the move. The employee drives 2400 miles and submits an expense report for
reimbursement to the employer for $75 for hotel, $110 for meals, and $1390 for mileage.
Calculate the taxable moving expense. - ANS-The correct answer is $938 (.575 x miles driven) -
(.23 x miles driven) + meals= Answer
A qualified transportation fringe benefit allows employers to provide employees which of the
following benefits? - ANS-Transit passes for public buses not to exceed $130 per month
Form 843 is used to file abatement for all the following EXCEPT: - ANS-tax overpayments
An employee earns $24,283.00 per month and is paid semimonthly. The employee has received
no income other than regular wages during the year. Calculate the amount of social security and
Medicare taxes to be withheld from the first pay in December. - ANS-285.33.
figure out the YTD if over 118500 for soc Sec - don't tax. If over 200000 times it by 2.35%
An employer transferred an employee in a qualified move and reimbursed the employee's
moving expenses. The employee spent $1,000.00 on house hunting, $5,000.00 to move
household goods, $500.00 for airfare to travel to the new location, and $10,000.00 in real estate
, commissions to sell the house. Calculate the amount of qualified moving expenses -
ANS-$5500
Household goods + airfare = answer
An independent contractor invoiced a company $2201 for services performed. The contractor
didn't provide a TIN before the payment was made. Calculate the federal withholding. -
ANS-$616.28
amount x 28% = answer
An employee earns $1,577.51 semimonthly and has a creditor garnishment of $30.00 when a
federal tax levy of $1,000.00 is received. The IRS exempts $429.17 each pay period from the
levy. The employee's combined withholding for federal income, social security, and Medicare
taxes is $515.06. Calculate the amount to be deducted for the federal levy each pay period. -
ANS-The correct answer is $603.28.
Wages-Garnishment-exempt amount-taxes = answer
An exempt employee earns $944.00 semimonthly. The employee's deductions include $26.00
for income tax, $72.22 for social security and Medicare taxes, $150.00 for court-ordered child
support, and $50.00 for a state tax levy. Calculate the employee's semimonthly disposable
earnings - ANS-The correct answer is $845.78.
Wages-taxes=answer
All of the following benefits can be offered under a Sec. 125 plan EXCEPT: - ANS-scholarship
and fellowship grants.
Employers may provide qualified transportation fringe benefits for: - ANS-bicycle commuting not
to exceed $20 per month
An employee earns $1,033.00 semimonthly. The employee's deductions include $51.00 for
federal income tax, $79.02 for social security and Medicare taxes, $284.00 for court-ordered
child support payments, and $98.00 for a state tax levy. Calculate the employee's semimonthly
disposable pay for the creditor garnishment - ANS-The correct answer is $902.98.
Don't subtract the other levies or child supports payments. Just the wages less taxes
What is the maximum amount an employer can withhold from an employee's disposable pay of
$585.00 each week for a creditor garnishment? - ANS-The correct answer is $146.25.
disposable pay x 25%
Finding the base FIT using Percentage Method: - ANS-
Finding the FIT on Supplemental Wages: Optional Fat Rate- - ANS-(Other compensation + any
reimbursement) x 25%,
Finding Social Security Tax: - ANS-Total Compensation x 6.2%
Finding Medicare Tax: - ANS-Total Compensation x 1.45%
Finding the net pay: - ANS-Total Compensation - Base FIT -Supplement FIT -Social Security
Tax- Medicare Tax -Reimbursements
Finding the FIT - ANS-Base pay - 401k-Section 125=Gross FIT...Number of allowances x
Amount per allowance= Allowance amount...Gross FIT compensation - Allowance amount =
Adjusted wages...Check the appropriate percentage table...Adjusted waged - Excess allowed =
Excess amount...Amount of tax + (% x Excess amount) = FIT withholding
- ANS-
Finding Soc Sec Tax: if YTD is under 118500 wages. - ANS-(Base pay - Sect 125 contrib) x
6.2%
Finding the medicare tax if YTD is under 200000 wages: - ANS-Base pay - Sect 125 x 1.45%
A nonexempt employee earns $10.00 per hour. Last week, the employee earned a production
bonus of $42.00 according to the union contract. The employee worked 44 hours last week.
Calculate the employee's gross pay for the week. - ANS-The correct answer is $503.91
Hours x rate
_____+ bonus =base
base/hours= regular rate of pay
RRP / 2 =OT rate
OT rate x OT hours= OT amount
OT amount + Base = answer
During an employee's qualified move, the employee drove 885 miles and submitted an expense
report to the employer in the amount of $698.88. Detailed on the expense report were $120.00
for hotel rooms for two nights, $70.00 in meals, and $508.88 for the mileage. Calculate the
taxable amount of the employee's moving expenses. - ANS-The correct answer is $375.33 (.575
x miles driven) - (.23 x miles driven) + meals= Answer
,During and employee's qualified move, the employee drove 1485 miles and submitted to the
employer the amount of $1,038.88. Detailed on the expense report were $120 for the hotel, $65
in meals and $853.88 for mileage. Calculate the taxable amount. - ANS-The correct answer is
577.33 (.575 x miles driven) - (.23 x miles driven) + meals= Answer
An employee died in March 2015, and is owed a $1200 supplemental bonus. The employee
total YTD compensation is 50000. Using Optimal Flat Rate method, calculate the total amount
of federal taxes to be withheld. - ANS-The answer is $91.80
Bonus x 7.65% = Answer ***FIT is NOT withheld***
A disadvantage of EFT compared to issuing paper checks is - ANS-the need for additional
information from the employee
An employer reimburses 100% of an employee's monthly parking space near the employee's
work site. The parking fees are $270 per month. Calculate the monthly taxable amount of the
parking reimbursement. - ANS-$20 Employer is taxed anything over $250
System generated audits trails may be limited due to: - ANS-System resources
An employee who meets the time test relocates 2400 miles away. The employer reimbursed all
expenses for the move. The employee drives 2400 miles and submits an expense report for
reimbursement to the employer for $75 for hotel, $110 for meals, and $1390 for mileage.
Calculate the taxable moving expense. - ANS-The correct answer is $938 (.575 x miles driven) -
(.23 x miles driven) + meals= Answer
A qualified transportation fringe benefit allows employers to provide employees which of the
following benefits? - ANS-Transit passes for public buses not to exceed $130 per month
Form 843 is used to file abatement for all the following EXCEPT: - ANS-tax overpayments
An employee earns $24,283.00 per month and is paid semimonthly. The employee has received
no income other than regular wages during the year. Calculate the amount of social security and
Medicare taxes to be withheld from the first pay in December. - ANS-285.33.
figure out the YTD if over 118500 for soc Sec - don't tax. If over 200000 times it by 2.35%
An employer transferred an employee in a qualified move and reimbursed the employee's
moving expenses. The employee spent $1,000.00 on house hunting, $5,000.00 to move
household goods, $500.00 for airfare to travel to the new location, and $10,000.00 in real estate
, commissions to sell the house. Calculate the amount of qualified moving expenses -
ANS-$5500
Household goods + airfare = answer
An independent contractor invoiced a company $2201 for services performed. The contractor
didn't provide a TIN before the payment was made. Calculate the federal withholding. -
ANS-$616.28
amount x 28% = answer
An employee earns $1,577.51 semimonthly and has a creditor garnishment of $30.00 when a
federal tax levy of $1,000.00 is received. The IRS exempts $429.17 each pay period from the
levy. The employee's combined withholding for federal income, social security, and Medicare
taxes is $515.06. Calculate the amount to be deducted for the federal levy each pay period. -
ANS-The correct answer is $603.28.
Wages-Garnishment-exempt amount-taxes = answer
An exempt employee earns $944.00 semimonthly. The employee's deductions include $26.00
for income tax, $72.22 for social security and Medicare taxes, $150.00 for court-ordered child
support, and $50.00 for a state tax levy. Calculate the employee's semimonthly disposable
earnings - ANS-The correct answer is $845.78.
Wages-taxes=answer
All of the following benefits can be offered under a Sec. 125 plan EXCEPT: - ANS-scholarship
and fellowship grants.
Employers may provide qualified transportation fringe benefits for: - ANS-bicycle commuting not
to exceed $20 per month
An employee earns $1,033.00 semimonthly. The employee's deductions include $51.00 for
federal income tax, $79.02 for social security and Medicare taxes, $284.00 for court-ordered
child support payments, and $98.00 for a state tax levy. Calculate the employee's semimonthly
disposable pay for the creditor garnishment - ANS-The correct answer is $902.98.
Don't subtract the other levies or child supports payments. Just the wages less taxes
What is the maximum amount an employer can withhold from an employee's disposable pay of
$585.00 each week for a creditor garnishment? - ANS-The correct answer is $146.25.
disposable pay x 25%
