2017 Take Home Quiz #1

Transcription

1 Employee/Independent Contractor 1. 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 the company indicating the worker is an independent contractor. B. a private letter ruling issued to another company in the same industry indicating similarly situated workers are independent contractors. C. information from published IRS rulings. D. showing at least 25% of its industry treats similarly situated workers as independent contractors. 2. Payments to a statutory nonemployee are reported on Form: A B MISC. C D. W The initial determination of whether a worker is an employee or an independent contractor is made by the: A. SSA. B. IRS. C. employer. D. worker. 4. Which of the following workers would be classified as an independent contractor? A. A day-care worker receiving a guaranteed minimum salary plus a percentage of the fees collected from her clients B. A former employee rehired after retiring to complete a task started before retirement C. A commercial artist furnishing her own tools and equipment and making a profit or loss D. A salaried copywriter required to work on-site and comply with the company's rules about starting and ending hours

2 FLSA 1. Under the FLSA, a nonexempt employee's regular rate of pay includes all of the following EXCEPT: A. cost-of-living adjustments. B. shift premiums. C. nondiscretionary bonuses. D. reimbursed expenses. 2. 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. An employee worked 40 hours during the week, including ten hours on a holiday. B. A hospital employee under an 8/80 agreement worked five 6-hour shifts one week and six 8-hour shifts the next week. C. An employee worked 30 hours in a week, called in sick Thursday and Friday, and received 16 hours of sick pay for the week. D. Over the last two weeks, a hospital employee under an 8/80 agreement worked 70 hours which included one 10-hour shift. 3. Under the FLSA, when determining whether a nonexempt employee is to be paid overtime, the employer uses the hours worked in a: A. day. B. workweek. C. pay period. D. month. 4. A nonexempt employee works 8 hours on Sunday, 12 hours on Monday, 9 hours on Tuesday, and 8 hours on Wednesday. In addition, the employee receives 8 hours of sick pay for Thursday. Under the FLSA, calculate the overtime hours, if any, for the week. A. 0 B. 4 C. 5 D. 8

3 5. 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 6. A change in the company workweek may be necessary to: A. reduce paying overtime. B. meet changing business needs. C. comply with the calendar week. D. adjust pay schedules during holidays

4 Employment Forms 1. An employee was hired in April 2016 and filed an exempt Form W-4. The employee's Form W-4 expires on: A. December 1, B. February 15, C. December 31, D. January 15, Unearned income includes all the following items EXCEPT: A. interest. B. capital gains. C. dividends. D. wages. 3. Employees submit Form W-4S to the: A. IRS. B. employer. C. third-party sick pay provider. D. payroll department. 4. An employee who files an exempt Form W-4 in 2016 must have: A. been a full-time student earning $ per month and claimed as a dependent in B. had no tax liability in 2015 and expect to have no tax liability in C. filed a Form W-4 in In which situation would the employer set an employee's withholding status to single and zero allowances? A. When the employee has requested more federal taxes be withheld B. When an employee has not submitted a new Form W-4 at the beginning of the calendar year C. When a new employee has submitted an incomplete Form W-4 D. When the employer has received a tax levy on the employee

5 6. In which situation must an employer change an employee's withholding status to single and zero allowances? A. When the employee has requested more federal taxes be withheld B. When an exempt Form W-4 expires and there is no prior W-4 on file C. When the employer receives a tax levy on the employee D. At the beginning of the calendar year 7. Form W-4S allows the third-party sick pay provider to withhold federal income tax based on: A. a flat amount. B. a flat percentage. C. the employee's marital status and allowances. D. the employee's marital status only.

6 Calculation of Regular Pay 1. Under the FLSA, calculate the regular rate of pay for a nonexempt employee who works 30 hours at $10.00 per hour and 20 hours at $15.00 per hour in a workweek. 2. A waitperson declares $ in tips this week and as a full-time employee, often works overtime. Can the employer take the tip credit on the overtime hours? A. No, the FLSA does not provide for time and one-half on tips B. Yes, if the state minimum wage is greater than the federal minimum wage C. Yes, the tip credit applies to all hours worked D. Yes, if the federal minimum wage is greater than the state minimum wage 3. A nonexempt salaried employee is paid $2, per month and normally works a 40-hour workweek. Calculate the employee's regular rate of pay when the employee works more than 40 hours in a workweek and has no other compensation. 4. Under the FLSA, calculate a nonexempt employee's regular rate of pay for a workweek when the employee is paid $3.00 for each item produced, produces 200 items, and works 45 hours. 5. Under the FLSA, when an employee is paid more than one rate of pay during a workweek, what is the employee's regular rate of pay? A. The highest pay rate B. The weighted average of the rates based on the hours worked C. The average of the pay rates D. The lowest pay rate

7 Calculation of Overtime Premium 1. Under the FLSA, calculate the overtime premium pay for a nonexempt employee who is paid $10.00 per hour and works 45 hours in the workweek. A. $25.00 B. $75.00 C. $ D. $ Under the FLSA, calculate a nonexempt employee's compensation for a workweek when the employee is paid $4.50 for each item produced, produces 100 items, and works 45 hours.. 3. Under the FLSA, all of the following factors are used in calculating a nonexempt employee's overtime premium EXCEPT: A. hours worked in excess of 40 in a workweek. B. all hours paid. C. regular rate of pay. D. all hours worked 4. A nonexempt salaried employee is paid $2, per month and normally works a 40-hour workweek. However, in this workweek the employee works 45 hours. Under the FLSA, calculate the employee's gross pay for the week?

8 Calculation of Federal Income Tax 1. When making a supplemental wage payment to an employee whose YTD supplemental wages exceed $1,000,000.00, what tax rate is used to calculate federal income tax withholding? A. 7.65% B. 25% C. 35% D. 39.6% 2. Using the Wage-Bracket Method, calculate the federal income tax withholding, based on the following information. An employee earns $1, semimonthly and claims married, 3 allowance(s). 3. Using the Percentage Method, calculate an employee's federal income tax withholding based on the following information. The employee earns $1, semimonthly and claims married, 0 allowance(s). 4. Using the Optional Flat Rate Method, calculate the federal income tax withholding based on the following information. An employee claims single, 1 allowance. The employee is paid a bonus of $ and has YTD wages of $15, Using the Optional Flat Rate Method, calculate the federal income tax withholding based on an employee's supplemental wage payment of $200, The employee has received $500, in supplemental wages during the year. 6. Using the Wage-Bracket Method, calculate the federal income tax withholding based on the following information. An employee claims married, 3 allowance(s). The employee earns $1, semimonthly.

9 Calculation of Social Security and Medicare Taxes 1. A company uses the Optional Flat Rate Method and has employees working in a state with no state or local income taxes. When grossing-up bonuses for employees who have already earned more than $118, but less than $200, in wages in the year, payroll should divide the amount of the bonus by what percentage? 2. An employee earns $16.00 per hour, works a 40-hour week, and earns no additional income. Calculate the social security and Medicare taxes to be withheld from the employee's first weekly paycheck in December. 3. As of December 1, an employee had earned $147, in salary, commissions, and bonuses. The employee's semimonthly salary is $3, Calculate the social security and Medicare taxes to be withheld from the employee's first pay in December. 4. Which of the following federal taxes, if any, must an employer withhold from an employee's tips when the amount reported is in excess of $20.00 in the month? A. Federal income tax only B. Social security and Medicare taxes only C. No taxes are required to be withheld D. Federal income, social security, and Medicare taxes 5. What is an employee's Medicare tax rate on Medicare taxable wages in excess of $200,000? A. 0.9% B. 1.45% C. 2.35% D. 2.9%

10 Calculation of Voluntary Deductions 1. An employer offers to withhold payments for health insurance, union dues, and charitable contributions as part of the company benefit plan. Which, if any, of these deductions require an employee authorization to withhold? A. Charitable contributions only B. All three require authorization C. Health insurance and charitable contributions only D. Union dues only 2. All of the following deductions are voluntary EXCEPT: A. credit union payments. B. charitable contributions. C. 401(k) contributions. D. creditor garnishments 3. A charitable contribution is substantiated with which two documents? A. Driver's license and social security card B. Pay stub and company I.D. card C. Forms W-2 and 941 D. Form W-2 and pledge card

11 Calculation of Involuntary Deductions An employee earns $ semimonthly. The employee's deductions include $39.00 for federal income tax, $69.62 for social security and Medicare taxes, $ for court-ordered child support payments, and $25.00 for a state tax levy. Calculate the employee's semimonthly disposable pay for the creditor garnishment. A true statement regarding an involuntary wage attachment is: A. federal tax levies continue until the obligation is released. B. a parent must be in arrears before withholding can be ordered for child support. C. creditor garnishments are limited to 20% of disposable pay by federal law. D. state law can require a larger deduction for child support than the federal law. 3. What is the maximum amount an employer can withhold from an employee's disposable pay of $ each week for a creditor garnishment? 4. An employee who is not supporting another family has $2, of disposable earnings. The employee is more than 12 weeks in arrears with child support payments. Calculate the maximum amount that can be deducted from the employee's pay for child support. 5. An employee's income is insufficient to deduct all the wage attachments received in the following order. These include a state tax levy, a federal tax levy, a child support order, and a creditor garnishment. Which wage attachment has the LAST priority? A. State tax levy B. Child support C. Creditor garnishment D. Federal tax levy

12 Calculation of Net Pay When calculating an employee's net pay, all of the following amounts are subtracted from gross earnings EXCEPT: A. taxable wages. B. cafeteria plan contributions. C. federal income tax. D. 401(k) contributions. 2. The formula for calculating an employee's net pay is: A. gross pay, less taxes withheld, less other deductions. B. gross pay, less taxes withheld, plus other deductions. C. other deductions, plus gross pay, less tax deductions. D. gross pay, plus tax deductions, plus other deductions. 3. Calculate an employee's net pay based on the following information. Paid weekly Hourly rate = $10.00 per hour Hours worked = 45 W-4 status = Married, two allowances YTD Wages = $35, Using the percentage method No state or local income taxes A. $ B. $ C. $ D. $423.14