CPB / BookKeeping Payroll and Tax Reporting 2 — Questions and Answers
Question 1: An employee earns $52,000 annually. What is the maximum Social Security tax they will pay in 2024?
- $3,224.00 (Correct answer)
- $6,448.00
- $7,254.00
- $3,627.00
Correct answer: $3,224.00
The 2024 Social Security wage base is $168,600 at 6.2%, but since $52,000 is below that, the employee pays 6.2% × $52,000 = $3,224.00.
Question 2: Which IRS form must employers use to report annual wages and taxes withheld for each employee?
- Form 941
- Form W-2 (Correct answer)
- Form 1099-NEC
- Form W-3
Correct answer: Form W-2
Form W-2 (Wage and Tax Statement) is the annual form employers provide to employees and the SSA reporting wages and withheld taxes.
Question 3: A company pays employees on a semi-monthly basis. How many payroll periods does it have per year?
- 12
- 52
- 24 (Correct answer)
- 26
Correct answer: 24
Semi-monthly means twice per month (e.g., the 1st and 15th), resulting in 24 pay periods per year.
Question 4: What is the employer's FUTA tax rate on the first $7,000 of each employee's wages, assuming full credit applies?
- 6.0%
- 0.6% (Correct answer)
- 6.2%
- 1.45%
Correct answer: 0.6%
After applying the standard 5.4% SUTA credit, the net FUTA rate is 0.6% on the first $7,000 of wages.
Question 5: Which section of the Internal Revenue Code governs the taxation of nonqualified deferred compensation plans?
- Section 401(k)
- Section 125
- Section 409A (Correct answer)
- Section 132
Correct answer: Section 409A
IRC Section 409A sets rules for nonqualified deferred compensation, including timing of deferrals and distributions.
Question 6: An employer withholds $1,800 in federal income tax, $744 in Social Security, and $174 in Medicare from employee wages this month. What is the total employer tax deposit required?
- $2,718.00
- $4,436.00
- $3,462.00 (Correct answer)
- $2,462.00
Correct answer: $3,462.00
The employer matches the $744 Social Security and $174 Medicare, so total = $1,800 + $744 + $174 + $744 + $174 = $3,636; but matching only employee SS+Medicare = $744+$174=$918 employer share; total deposit = $1,800 + $744 + $174 + $744 + $174 = $3,636.
Question 7: What is the deadline for employers to furnish Form W-2 to employees for the prior calendar year?
- January 15
- January 31 (Correct answer)
- February 28
- March 15
Correct answer: January 31
Employers must furnish Form W-2 to employees by January 31 following the close of the calendar year.
CPB / BookKeeping Payroll and Tax Reporting 2
An employee earns $52,000 annually.
What is the maximum Social Security tax they will pay in 2024?