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Exam 3: Social Security Taxes

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Question 1

True/False

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FICA does not consider the first six months of sick pay as taxable wages.

A) True
B) False

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Question 2

Multiple Choice

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The taxes imposed under the Social Security Act consist of:

A) two taxes on employers.
B) two taxes on employees.
C) OASDI and HI taxes.
D) taxes on the net earnings of the self-employed.
E) all of the above.

F) B) and D)
G) A) and B)

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Question 3

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Refer to Instruction 3-1.Eager,a tipped employee,reported to his employer that he had received $320 in tips during March.On the next payday,April 6,he was paid his regular salary of $400. a) The amount of OASDI taxes to wi thhold from Eager's pay is_______ b) The amount of HI taxes to withhold from Eager's pay is___________

Employers who fail to file employment tax returns are subject to both civil and criminal penalties.

Employees are liable for their FICA taxes only until the taxes have been collected from their pay by their employer.

FICA defines all of the following as employees except:

Peter,age 17 and employed by his family-owned corporation,is covered under FICA.

The Social Security Act does not require self-employed persons to have an account number.

Under SECA,all of an individual's self-employment income is counted in determining the HI tax.

If an employee,who works two or more separate jobs,pays OASDI taxes on wages in excess of the taxable wage base,the employee is entitled to a refund of the overpayment.

Employees of a state government hired before January 1,1986,and covered by a public retirement plan,are exempt from FICA coverage.

The FICA tax rates for the self-employed are:

Each of the following items is accurately defined under FICA as taxable wages except:

Refer to Instruction 3-1.On the last weekly pay of the first quarter,Lorenz is paid her current pay of $90 per day for four days worked and one day sick pay (total-$450).She is also paid her first quarter commission of $1,200 in this pay.How much will be deducted for: a) OASDI tax ________ b) HI tax__________-

Employer payments made directly to employees in lieu of health insurance coverage are taxable wages.

FICA excludes from coverage all of the following kinds of employment except:

The FICA tax rates and taxable wage bases are exactly the same for the employee and employer when the employee makes $200,000 or less.

Employers do not pay payroll taxes on payments made to independent contractors.

Monthly depositors are required to deposit their taxes by the 15th day of the following month.

Businesses with $2,500 or less in quarterly tax liabilities can pay the taxes when they file Form 941.