CPP Certified Payroll Professional Exam 140 Questions with Verified Answers 2019 ,100% CORRECT

CPP Certified Payroll Professional Exam 140 Questions with Verified Answers 2019 Counseling is appropriate when: a. salaries have been frozen. b. introducing a new procedure. c. explaining tax law changes. d. orienting new employees. - CORRECT ANSWER a. salaries have been frozen. In addition to the accuracy-related penalty for underpayment of taxes, if the underpayment of taxes is due to fraud, the IRS may asses an additional penalty of: - CORRECT ANSWER 75% If an employer's total tax liability for the lookback period is $75,000.00, a tax liability less than $100,000 must be deposited no later than: - CORRECT ANSWER Wednesday or Friday under the semiweekly rules. A company has accrued $23,665.00 of vacation pay to a liability account. When employees are paid the vacation amount due, the entries to the vacation liability account will be recorded as a: - CORRECT ANSWER debit to the liability account. Under the FLSA, when a highly compensated exempt employee receives less than $100,000.00 in compensation during the year, the employer may: - CORRECT ANSWER within one month after the end of the year, make a final payment to the employee to reach $100,000.00 in annual compensation. Cafeteria plans and other flexible benefit plans are generally funded by either of the following mechanisms: - CORRECT ANSWER "flex dollars" or "flex credits", salary reduction, or after tax contributions. IRC §125 Cafeteria plans are generally funded by all of the following mechanisms EXCEPT: a. flex dollars". b. COBRA. c. after-tax employee contributions. d. salary reduction. - CORRECT ANSWER b. COBRA. Form W-4S allows the third-party sick pay provider to withhold federal income tax based on: - CORRECT ANSWER a flat amount. A National Medical Support Notice requires an employer to: - CORRECT ANSWER honor the qualified medical child support order. An employee with year-to-date wages of $25,000.00 was disabled for four months and was paid $6,200.00 by a third-party insurer. The disability plan premiums are paid entirely by the employer. No Form W-4S was provided to the insurer. Calculate the amount of federal income, social security, and Medicare taxes the third party payer must withhold. - CORRECT ANSWER $474.30 - Social security and Medicare taxes are withheld for six calendar months after the employee's last day of work. If an employer sells or transfers its business: - CORRECT ANSWER Form 941 must be filed by both the previous and current owners for the quarter during which the sale took place. Each employer must report only the wages it paid and taxes it withheld. If an employer goes out of business, completion of Part 3 of Form 941 is required with the final date it paid wages. This action also accelerates the date the Forms W-2 are due to SSA to: - CORRECT ANSWER the end of the second month following the quarter the business closed. An employee earns $1,000.00 semimonthly. Deductions include $235.00 for federal income, social security, Medicare, and state taxes and $300.00 in child support. Calculate the amount that can be deducted for a creditor garnishment. - CORRECT ANSWER Under the CCPA for a creditor garnishment, an employer must withhold the lesser of 25% of the employee's disposable earnings or the difference between the employee's disposable earnings and 30 times the minimum wage to satisfy the creditor garnishment. If an employee has an involuntary deduction with a higher priority deduction than the CCPA limit for creditor garnishments, nothing will be withheld. What is a Lock-In letter? - CORRECT ANSWER A letter from the IRS that requires the employer to change the with holdings for federal tax. How long do IRS Payroll records need to be saved? - CORRECT ANSWER 4 years after the tax returns due date. (ie 940, 941, W-2 and W-3) What is the allowable tip credit? - CORRECT ANSWER No more than $5.12 per hour Minimum wage for tipped employees - CORRECT ANSWER $2.13 per hour (combined with tips must equal $7.25) Social Security Wage Tax Limit - CORRECT ANSWER $132,900 What is the Mandatory Flat Rate for supplemental pay? - CORRECT ANSWER Exceeding $1 Million is 37% What is the Optional Flat Rate for Supplemental Pay? - CORRECT ANSWER Not Exceeding $1 Million is 22% If form W-4 is incomplete, the employer must: - CORRECT ANSWER Reject the form Under the FLSA, an employee wort time ends when the employee: - CORRECT ANSWER ceases performing principal activities When an employee wants to continue her exempt status the next year, she must file a new W-4 form by: - CORRECT ANSWER February 15. Counseling is appropriate when: - CORRECT ANSWER an employee feels insecure about work performance. What is the definition of Imputed Income? - CORRECT ANSWER Taxable value of noncash benefits the employee recieves. What must be specified at the time of the employees election to defer into a non-qualified plan? - CORRECT ANSWER the time and form of distributions Schedule R (Form 941) is used to: - CORRECT ANSWER allocate the aggregate information reported on Form 941 by an agent to each client. The Primary purpose of batch controls is to: - CORRECT ANSWER validate entry accuracy When is form 1042-S required to be provided to the IRS? - CORRECT ANSWER March 15th 457b - CORRECT ANSWER Employee pre-tax dollars diverted into investment account for governmental employees Under the IRS Rules, an employer's 401(k) plan may meet the ADP nondiscrimination testing requirements by matching: - CORRECT ANSWER 100% of elective deferrals to 3% of compensation and 50% of deferrals over 3% to 5% of compensation The FLSA's minimum salary for exempt employees does not apply to: - CORRECT ANSWER attorneys, physicians and teachers. A nonresident alien wishing to claim an exemption from income tax on wages paid by the employer based on a home country income tax treaty must provide the employer with Form: - CORRECT ANSWER 8233 An employee's primary job duties include managing a department with three full-time employees. Under the FLSA, the employee is an exempt: - CORRECT ANSWER executive employee. Form 1042 must be provided to the IRS by: - CORRECT ANSWER March 15 Which type of plan allows special catch-up contributions beyond the deferred limit in the employee's final three years before normal retirement age? - CORRECT ANSWER 457(b) Training, hiring, and delegating are components of: - CORRECT ANSWER Staffing An employer who fails to comply with the COBRA continuation coverage requirements for one qualified beneficiary will be subject to a noncompliance penalty per day in the amount of: - CORRECT ANSWER $100.00 for each beneficiary. Both state and federal governments regulate: - CORRECT ANSWER Child Labor Employers may provide qualified transportation fringe benefits for: - CORRECT ANSWER transit passes for public buses not to exceed $265.00 per month. Taxes withheld from fringe benefits are deposited with the IRS: - CORRECT ANSWER according to the deposit rules for taxes withheld from regular earnings. In the Electronic Income Withholding Order (e-IWO) process employers and state child support agencies can share all of the following information EXCEPT: a. new, original, or amended withholding order information. b. work state administrative fee schedule. c. employer acknowledgement files. d. termination of noncustodial parent's employment. - CORRECT ANSWER b. work state administrative fee schedule. Which of the following benefits requires Form W-2 Box 12 reporting of employer contributions? - CORRECT ANSWER Health Savings Accounts U.S. citizens working for U.S. companies abroad are generally subject to: - CORRECT ANSWER federal income tax, social security, and Medicare taxes, unless specific exclusions exist. When an employer does not withhold the taxes on fringe benefits from an employee but recovers the taxes from the employee's other wages, the taxes must be recovered by: - CORRECT ANSWER April 1 Under the FLSA, which of the following documents must be retained for at least two years? - CORRECT ANSWER Wage Rate Tables Forms 940 and 941 can be filed electronically by using: - CORRECT ANSWER the Employment Tax e-file system. Which form is used by a local government employer when withholding only Medicare tax? - CORRECT ANSWER 941 The maximum base housing amount for an expatriate in 2019 is: - CORRECT ANSWER $16,944.00 Qualified expenses under a Health Flexible Spending Arrangement incurred for over-the-counter medicine or drugs (except insulin) require: - CORRECT ANSWER a prescription Which of the following plans can discriminate in favor of highly compensated employees? a. 401(k) plans b. 403(b) plans c. 457(b) plans d. Qualified defined benefit plans - CORRECT ANSWER 457(b) plans Which type of health plan provides a choice of a higher level of benefits and lower out-of-pocket costs if plan's participant uses providers who are in the network? a. Preferred Provider Organizations b. Health Maintenance Organizations c. State Health Care Exchanges d. Traditional Health Insurance Plans - CORRECT ANSWER PPO - Preferred Provider Organizations The voluntary agreement between a state and the federal Department of Health and Human Services (HHS) covering the state's employees under the social security and Medicare programs is known as a: - CORRECT ANSWER §132 agreement. Multiple Worksite Reporting is used by which agency? - CORRECT ANSWER Bureau of Labor Statistics An external audit provides: - CORRECT ANSWER an assessment of the financial statements Liabilities are defined as - CORRECT ANSWER claim against the company assets Balance Sheet Equation - CORRECT ANSWER Assets = Liabilities + Owner's Equity When reporting the cost of employer provided health coverage on Form W-2, all the following methods can be used for calcullating the amount EXCEPT: a. COBRA applicable premium method b. premium charge method c. actual COBRA premium charged method d. modified COBRA premium method - CORRECT ANSWER c. actual COBRA premium charged method The health insurance amount reported on Form W-2 in Box 12, with Code DD is: - CORRECT ANSWER For informational purposes only An agreement between a state and the federal department of Health and Human Services (HHS) is known as - CORRECT ANSWER §218 agreement. The foreign earned income exclusion limit for a qualified employee in 2019 is - CORRECT ANSWER $105,900 Totalization agreements - CORRECT ANSWER Designed to prevent double taxation in social security and medicare What types of Visas are avaliable for foreign nationals seeking admission to the US? - CORRECT ANSWER Immigrant and Nonimmigrant Form SS-5 is used to: - CORRECT ANSWER obtain a new social security card or have a card reissued. In determining the source of income for services performed by a nonresident alien partly inside and partly outside the U.S., compensation may be determined based on any of the following procedures EXCEPT on: a. the date the employee returned to full-time U.S. employment. b. the ratio of full days worked in U.S. versus total number of days worked. c. the performance of specific action. d. a geographic basis. - CORRECT ANSWER a. the date the employee returned to full-time U.S. employment. Under the FLSA, an employee under the age of 20 can be paid the opportunity wage of 44.25 for a maximum of: - CORRECT ANSWER 90 calendar days. Which of the following deductions should never be put in arrears? a. Charitable contributions b. Group-term life insurance c. Garnishments d. Health insurance deductions - CORRECT ANSWER c. Garnishments Form 941, line 2, Wages, tips, and other compensation, requires what amount to be entered? - CORRECT ANSWER Taxable Payroll Which of the following statements is true regarding master file data? a. An employer may make electronic copies of all records. b. Employers must be able to produce original records for the IRS immediately. c. The DOL requires annual updating of employment data. d. Employers must keep the original paper copy of all IRS forms. - CORRECT ANSWER An employer may make electronic copies of all records. A waitperson declares $175.00 in tips this week and as a full-time employee, often works overtime. Can the employer take the tip credit on the overtime hours? - CORRECT ANSWER Yes, the tip credit applies to all hours worked Under the FLSA, highly compensated employees are classified as exempt EXCEPT when: a. performing non-manual work. b. meeting one requirement of the administrative, professional, executive or outside sales exemption. c. paid a weekly salary less than $455.00. d. annual compensation is $100,000.00 or more. - CORRECT ANSWER c. paid a weekly salary less than $455.00. Optimum customer service within the payroll department includes all of the following principles EXCEPT: a. reliability. b. tangibles. c. sympathy. d. assurance. - CORRECT ANSWER c. sympathy IRC §125 generally prohibits the deferral of compensation from one plan year to the next. The exception to this rule includes all of the following benefits EXCEPT for: a. a cash or deferred arrangements under IRC §401(k). b. contributions to Health Savings Accounts (HSA). c. the carryover of up to $500 in a Medical FSA. d. the purchased vacation days. - CORRECT ANSWER d. the purchased vacation days Which of the following employer-paid meals or lodging is taxable? a. Subsidized meals in the company's all-employee cafeteria b. Itemized hotel bill when away from home for a company-sponsored conference. c. Substantiated meals while traveling away from home on business d. Meals while moving from an old home to a new home. - CORRECT ANSWER d. Meals while moving from an old home to a new home. Employees submit Form W-4S to the: a. employer. b. payroll department. c. IRS. d. third-party sick pay provider. - CORRECT ANSWER d. third-party sick pay provider The repayment of overpaid wages by an employee impacts: a. electronic funds transfers. b. end-of-month balances. c. monthly totals of the payroll register. d. accounting and tax records. - CORRECT ANSWER d. accounting and tax records. A computerized payroll system can help a payroll department accomplish all of the following tasks EXCEPT: a. produce timely, accurate paychecks. b. maintain compliance with laws and regulations. c. retain records. d. recognize changes in laws and regulations. - CORRECT ANSWER d. recognize changes in laws and regulations. The foreign earned income exclusion limit for a qualified employee in 2019 is: - CORRECT ANSWER $105,900.00 Health Reimbursement Arrangements (HRAs) are paid for by: a. employers only. b. employees only. c. employers and employees combined. d. either the employer or the employee, but not both. - CORRECT ANSWER a. employers only. To correct a direct deposit payment made in error, within five banking days the employer must generate a: a. credit authorization. b. single-entry reversal. c. double-entry reversal. d. debit authorization. - CORRECT ANSWER b. single-entry reversal. To foster a positive environment, payroll professionals must develop all of the following interpersonal skills EXCEPT: a. motivation skills. b. leadership skills. c. cultural awareness. d. change management. - CORRECT ANSWER d. change management The value of an employee's personal use of a company-provided car during November 2019 was $112.00. The company uses the special accounting rule beginning November 1 for reporting personal use of the company provided cars. When is the W-2 form due that the $112.00 is reported? a. December 31, 2019 b. January 31, 2020 c. January 31, 2021 d. It is not reported. - CORRECT ANSWER c. January 31, 2021 IRS regulations define all of the following payments as supplemental payments EXCEPT: a. hourly pay. b. severance. c. overtime pay. d. tips. - CORRECT ANSWER a. hourly pay The IRS defines supplemental wages as: - CORRECT ANSWER amounts paid for a pay period at an hourly, daily, or other periodic rate or predetermined fixed amount that are not regular wages. Coaching is appropriate when: a. two employees are in conflict. b. teaching new skills. c. promotion opportunities are limited. d. an employee is unhappy. - CORRECT ANSWER b. teaching new skills An employer reimburses 100% of an employee's monthly parking for a parking space near the employee's work site. The parking fees are $261.00 per month. Calculate the monthly taxable amount of the parking reimbursement. - CORRECT ANSWER $0.00 For a nonqualified deferred compensation plan to exclude deferrals from income, distributions can be allowed: a. when the employee receives a golden parachute payment. b. when there is a change in control of the corporation. c. when the employee reaches age 65. d. when the employee reaches normal retirement age. - CORRECT ANSWER b. when there is a change in control of the corporation. During 2019, an employee drove a total of 3,100 miles for personal use in a company vehicle valued at $15,000.00. Using the cents-per-mile method, calculate the value of the employee's personal use of the company vehicle. - CORRECT ANSWER 0.58 cents per mile x 3100 miles = $1,798.00 In the Electronic Income Withholding Order (e-IWO) process employers and state child support agencies can share all of the following information EXCEPT: a. termination of noncustodial parent's employment. b. new, original, or amended withholding order information. c. work state administrative fee schedule. d. employer acknowledgement files. - CORRECT ANSWER c. work state administrative fee schedule. In order to reconcile Forms W-2 with Form 941 when third-party sick pay is paid, what form must be filed with the IRS? - CORRECT ANSWER 8922 The following situations are maximum periods of health insurance continuation coverage under COBRA EXCEPT: a. 18 months for an employee's termination. b. 24 months for long-term disability. c. 29 months for social security disability during the first 60 days of continued coverage. d. 36 months for an employee's death. - CORRECT ANSWER b. 24 months for long-term disability Which of the following regulations is governed by both the state and the federal governments? a. Final pay to a terminated employee b. Breaks c. Exempt/nonexempt status d. Frequency of pay - CORRECT ANSWER c. Exempt/nonexempt status A company pays an employee's membership fee to a work-related professional association. How does the IRC define these payments? - CORRECT ANSWER Working condition fringes The voluntary agreement between a state and the federal Department of Health and Human Services (HHS) covering the state's employees under the social security and Medicare programs is known as a: a. §125 agreement. b. §132 agreement. c. §137 agreement. d. §218 agreement. - CORRECT ANSWER d. §218 agreement. COBRA coverage ends before the maximum coverage periods are reached in all of the following situations EXCEPT when the: a. required COBRA premium is not paid within 45 days of the due date. b. qualified beneficiary becomes covered under another group health plan. c. qualified beneficiary becomes entitled to Medicare benefits. d. employer ceases to provide group health coverage to its employees. - CORRECT ANSWER a. required COBRA premium is not paid within 45 days of the due date. All of the following qualified benefits can be offered under a Sec. 125 plan EXCEPT: a. adoption assistance. b. deferred compensation to a 403(b) plan. c. elective vacation days. d. deferred compensation to a 401(k) plan. - CORRECT ANSWER b. deferred compensation to a 403(b) plan. The payroll tax deposit due date falls on a non-business day. A monthly depositor must deposit its payroll tax liability: - CORRECT ANSWER a. by the next business day. Under the FLSA's white collar exemptions rules, an exempt administrative employee must meet all of the following requirements EXCEPT: a. managing a customarily recognized department. b. exercising discretion on matters of significance. c. performing non-manual work relating to the general business operations. d. being paid a weekly salary of at least $455.00. - CORRECT ANSWER a. managing a customarily recognized department. An individual receiving a taxable periodic distribution from a qualified pension plan does not file Form W-4P. With no Form W-4P on file, what marital status and allowances is used to calculate federal income tax withholding? a. single with 0 allowances. b. single with 1 allowance. c. married with 2 allowances. d. married with 3 allowances. - CORRECT ANSWER d. married with 3 allowances. In the year of an employee's death, all payments are subject to social security (6.2%) and Medicare (1.45%) tax withholding and are reported in Boxes 3 and 5 on Form W-2. The recipient of the payment will receive Form 1099-MISC reporting the payments made after the employee's death. - CORRECT ANSWER In the year of an employee's death, all payments are subject to social security (6.2%) and Medicare (1.45%) tax withholding and are reported in Boxes 3 and 5 on Form W-2. The recipient of the payment will receive Form 1099-MISC reporting the payments made after the employee's death. In January, a senior vice president of a company received a nonqualified stock option to buy up to 500 shares of stock at $20.00 per share. In April, when the company stock was trading at $30.00, the employee exercised the option and purchased 500 shares of stock. The payroll department must: - CORRECT ANSWER withhold federal income, social security, and Medicare taxes on $5,000.00; report $5,000.00 in taxable compensation on Form W-2. The payroll department must withhold federal income, social security, and Medicare taxes on $5,000.00 ((500 shares X ($30 - $20)) and report $5,000.00 in taxable compensation on Form W-2. When the option is exercised, the employee has income equal to the excess of the fair market value of the stock when the option is exercised over the price paid by the employee. The management trait that best fits the empowerment management style is to: a. provide guidelines, identify resources, and accountability. b. excel at coaching employees. c. have low task, high relationship. d. strive to nurture security, guidance, wisdom, and power. - CORRECT ANSWER a. provide guidelines, identify resources, and accountability. An employee rides 470 miles monthly to work in a company provided 7-passenger van used exclusively for commuting. The employer has organized a vanpool, offering rides to four other employees. The employer uses the cents-per-mile method to determine the value of the commute. Calculate the taxable amount of the benefit. - CORRECT ANSWER cents per mile ($0.580 per mile) -- may be used to determine the fair-market value of the benefit. The qualified transportation fringe benefit's monthly exclusion is $265.00. Amounts in excess of $265.00 per month are taxable. 470 x .58 = $272.60 $272.60 - 265.00 = $7.60 Taxable Amount Under the FLSA's white collar exemptions rules, an exempt professional employee must meet all of the following requirements EXCEPT: a. having authority to hire and fire employees. b. consistently exercising discretion and judgment. c. being paid a weekly salary of at least $455.00. d. having knowledge acquired through prolonged study. - CORRECT ANSWER a. having authority to hire and fire employees. If an employer's 401(k) plan fails the ADP test, what action must the employer take to keep the plan qualified? - CORRECT ANSWER Actions can be distributing excess deferrals to highly compensated employees or make matching contributions to all eligible employees. The frequency of payments to employees is governed by: a. State regulations only. b. DOL regulations only. c. Both DOL and state regulations. d. No laws or regulations govern the frequency of pay to employees. - CORRECT ANSWER a. state regulations only. Which of the following statements is true regarding Sec. 125 plans? a. The benefit options must include both cash and qualified nontaxable benefits. b. Benefits in the plan must include group-term life insurance, medical/dental coverage, employee discounts, and scholarship grants. c. At the end of the plan year, employees receive cash payments for remaining unreimbursed amounts. d. Any benefits received in cash are not taxable. - CORRECT ANSWER a. The benefit options must include both cash and qualified nontaxable benefits. onqualified stock options are subject to federal income tax withholding when the: a. stock is purchased by the employer. b. option is granted by the company. c. employee exercises the option. d. stock is sold by the employee. - CORRECT ANSWER c. employee exercises the option. The shortfall make-up deposit must be made for a semiweekly depositor by the: a. end of the current month. b. end of the next month. c. end of the current quarter. d. first Wednesday or Friday on or after the 15th of the next month or due date of the return, whichever is earliest. - CORRECT ANSWER d. first Wednesday or Friday on or after the 15th of the next month or due date of the return, whichever is earliest. When an employer with multiple organizations has an employee that meets the common paymaster requirements, what occurs? a. An employee is paid by a paymaster in the group of organizations with common ownership. b. An employee's social security wage base for both organizations is combined. c. The employee's combined wages are not used to determine if the threshold for the Additional Medicare tax has been reached. d. An employee's social security wage base starts over. - CORRECT ANSWER An employee's social security wage base for both organizations is combined. Which box on the 2019 Form W-2 is correctly matched with its use? a. Box 10--Nonqualified plans b. Box 11--Social security tips c. Box 12 (Code N)--Uncollected Medicare tax on GTL insurance coverage d. Box 15--Medicare tax withheld - CORRECT ANSWER c. Box 12 (Code N)--Uncollected Medicare tax on GTL insurance coverage Organizations failing to file information returns timely, with correct information, or in the correct format are subject to the three-tier penalty structure in effect if submitted before March 2nd how much is the penalty per return? - CORRECT ANSWER $50.00/return Organizations failing to file information returns timely, with correct information, or in the correct format are subject to the three-tier penalty structure in effect if submitted after March 3rd but before August 1st how much is the penalty per return? - CORRECT ANSWER $110/return Organizations failing to file information returns timely, with correct information, or in the correct format are subject to the three-tier penalty structure in effect if submitted after August 1st how much is the penalty per return? - CORRECT ANSWER $270/return A cafeteria plan may be funded by any of the following EXCEPT: a. benefit exchange dollars. b. salary reduction. c. flex dollars or flex credits. d. after-tax employee contributions. - CORRECT ANSWER a. benefit exchange dollars. An employee traveled to New York City, a high-cost locality, on company business. During the one-night stay, the employer paid a per diem of $308.00 and required expenses to be documented. The employer uses the federal high/low per diem rates to reimburse the employee's travel expenses. The tax implication to the employee, with a current high rate of $287.00 for travel is: a. $21.00 of the reimbursement is taxable. b. The employee has no tax implications. c. The employee can deduct $308.00 from his personal income taxes. d. $287.00 of the reimbursement is taxable. - CORRECT ANSWER a. $21.00 of the reimbursement is taxable. Unearned income includes all the following items EXCEPT: a. wages. b. capital gains. c. interest. d. dividends. - CORRECT ANSWER a. wages Under IRS regulations, how many years must an employee's address be retained? - CORRECT ANSWER 4 years An employer has been authorized by the employee to make deductions from the employee's wages for union dues and health insurance. In what order must the employer withhold these deductions? a. Health insurance, union dues b. Union dues, health insurance c. Any order the employer chooses d. Any order the employee chooses - CORRECT ANSWER c. Any order the employer chooses Under the FLSA for a Sunday to Saturday workweek, in which of the following situations must a nonexempt employee be paid an overtime premium? a. A hospital employee under an 8/80 agreement worked five 6-hour shifts one week and six 8-hour shifts the next week. b. An employee worked 40 hours during the week, including ten hours on a holiday. c. Over the last two weeks, a hospital employee under an 8/80 agreement worked 70 hours which included one 10-hour shift. d. An employee worked five eight-hour shifts per week not including commute time of two hours a day. - CORRECT ANSWER c. Over the last two weeks, a hospital employee under an 8/80 agreement worked 70 hours which included one 10-hour shift. The purpose of a tax treaty is to: a. verify the employee is legally authorized to work in the foreign country. b. allow a nonresident alien independent contractor to claim exempt from income tax withholding. c. avoid double taxation of income. d. prevent double taxation of social security taxes. - CORRECT ANSWER c. avoid double taxation of income. On Tuesday, a semiweekly depositor incurs a payroll tax liability of $80,000.00; on Wednesday, another payroll tax liability of $25,000.00 is incurred. What deposit(s) must be made? a. $105,000.00 on Thursday b. $105,000.00 on the following Wednesday c. $80,000.00 on the next Friday and $25,000 on the next Wednesday d. $105,000.00 on the next Friday - CORRECT ANSWER c. $80,000.00 on the next Friday and $25,000 on the next Wednesday An example of a statutory nonemployee is a: a. driver who picks up and delivers dry cleaning. b. person engaged in directly selling consumer products in the home. c. person who works at home on materials supplied by a company. d. full-time life insurance agent selling annuity contacts. - CORRECT ANSWER person engaged in directly selling consumer products in the home. An employee's biweekly disposable earnings are $2,300.00. Under the CCPA, calculate the maximum creditor garnishment deduction. - CORRECT ANSWER 25% = $575.00 An individual with an assertive communication style is described as one who: a. enjoys speculating on possibilities before getting down to the facts. b. wants things arranged logically in beginning-to-end sequences. c. is most interested in how an idea will affect other people. d. prefers facts over speculation and prefers detailed advanced planning. - CORRECT ANSWER d. prefers facts over speculation and prefers detailed advanced planning. State unemployment taxes are used to fund: - CORRECT ANSWER Unemployment benefits Repayment of overpaid wages in the current year are: a. netted against subsequent year wages for tax purposes. b. not reported to the employee for tax purposes. c. netted against prior year wages for tax purposes. d. netted against current year wages for tax purposes. - CORRECT ANSWER d. netted against current year wages for tax purposes. A Taxpayer Identification Number and name reported on Form 1099-MISC can be checked by using the: a. SSA's TIN Matching System. b. IRS's TIN Matching System. c. IRS's Social Security Number Verification System. d. SSA's Social Security Number Verification Service. - CORRECT ANSWER IRS's TIN Matching System. The first step in resolving a late direct deposit is to: a. contact the originating financial institution. b. verify the account and routing number. c. notify all employees to check their accounts. d. contact the Federal Reserve. - CORRECT ANSWER verify the account and routing number. Under what condition is a Form 1042-T filed? a. When paper Forms 1042-S are filed with the IRS b. When Forms 1042-S are filed electronically with the SSA c. When paper Forms 1042 are filed with the SSA d. When Forms 1042-S are filed electronically with the IRS - CORRECT ANSWER When paper Forms 1042-S are filed with the IRS A nondiscretionary bonus is a: a. gift provided at a holiday. b. benefit plan provided to all employees. c. contractual bonus paid based on the employee's production, efficiency or other measure of performance. d. non-contractual profit-sharing bonus. - CORRECT ANSWER contractual bonus paid based on the employee's production, efficiency or other measure of performance. What does the perjury statement on Form W-4 indicate? a. The employee attests to the accuracy of the data b. The employee agrees with all the statements on the form c. The employer has verified the data on the form d. The employee disputes the data entered on the form - CORRECT ANSWER The employee attests to the accuracy of the data An employee was given a below-market loan of $24,000.00. The current IRS interest rate is 9%, and the employer charges an 7% interest rate. Calculate the income to be added to the employee's Form W-2. a. $480.00 b. $2,160.00 c. $1,680.00 d. $3,840.00 - CORRECT ANSWER $480.00 The difference between the two rates 2% times the loan amount Counseling is appropriate when: a. orienting new employees. b. dealing with personal problems. c. helping an employee master a new challenge. d. improving an employee's skills. - CORRECT ANSWER dealing with personal problems. After an employer receives an IRS penalty notice for an employee's failure to provide a correct name and SSN, when must the employer request the employee complete Form W-4? a. Each month thereafter b. Each quarter thereafter c. By December 31st of that year d. Each pay period thereafter - CORRECT ANSWER By December 31st of that year Employees submit Form W-4S to the: a. IRS. b. third-party sick pay provider. c. payroll department. d. employer. - CORRECT ANSWER third-party sick pay provider. What fluctuates for employees paid on a fluctuating workweek? a. Hours worked only b. Salary paid each week only c. The workweek d. Both hours and salary - CORRECT ANSWER Hours worked only Under the FLSA's white collar exemptions rules, an exempt professional employee must meet all of the following requirements EXCEPT: a. being paid a weekly salary of at least $455.00. b. consistently exercising discretion and judgment. c. having knowledge acquired through prolonged study. d. having authority to hire and fire employees. - CORRECT ANSWER having authority to hire and fire employees. An expatriate is someone who: - CORRECT ANSWER lives and works outside his or her own country An expatriate employee may qualify for the foreign earned income exclusion under: - CORRECT ANSWER either the physical presence test or the bona fide residence test.