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135 Cards in this Set
- Front
- Back
Common Law Test and categories |
IRC way to determine worker as EE or contractor. Behavioral control Financial control Relationship of the parties |
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Behavioral control |
Right to control or direct means by which worker performs the work done |
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Financial control |
Whether worker has the opportunity to make a profit or suffer a loss |
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Relationship of parties |
Determined by examining how the worker amd the ER perceive their relationship. (if w-2 is files or EE receives benefits or is an EE ) |
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SS-8 |
Form used to receive a definitive IRS ruling as to a workers status (EE or 1099) |
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Reasonable basis |
Defined by sec 530 of revenue act of 1978. ER may treat workers which would be EEs under common law test as 1099 under reasonable basis |
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Backup withholding |
28% is withheld if payee fails to provide Tin or IRS has notified the payer that the Tin is incorrect |
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W-9 |
Request for Taxpayer ID number and certification |
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Federal New Hire Reporting Requirement |
EEs name address and ssn Ers name address and fein Date of hire |
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Rehired EE must be reported when they have been separated from organization for how long? |
60 days |
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Ers must report new hires within what time frame |
20 calendar datys of DOH |
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Info required for SSN verification purposes |
EEs SSN full name and DOB |
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White collar exemptions |
Administrative (at least $455 a week) Executive (455) Any EE who owns at least 20% of enterprise Professional EE 455 Computer professionals (make more than 27.63 an hour) Outside sales |
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Supplemental disability payment |
Brings wage of partially disabled worker up to EEs pretty disability wage level |
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Gift |
Amt paid to EE on a special occasion. Not included in EEs regular rate of pay so long as amount does not depend on hrs worked, production, or efficiency. |
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Engaged to be waiting |
Compensable worktime bc ER requires EE to wait to begin work |
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Waiting to Be engaged |
Not worktime bc EE is freed from all duties for a definite period of time and has enough time to pursue personal business before returning to work |
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Remedial education exemption |
ER may employ a worker for up to hrs over 40 Hr workweek without having to pay overtime if extra hours are spent in a remedial education program (not graduated HS and not job specific training) |
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Minors age 14& 15 |
Cannot work during school hrs Limited to 3 hrs a day and 18 a week when school is in session |
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FMLA |
Guarantees EEs 12 weeks of unpaid leave within a 12 month period |
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I-9 |
Employment eligibility verification |
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Form I-551 |
Permanent resident card (green card) or alien registration receipt card |
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I-776 |
Employment authorization document with a photograph |
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SS-5 |
Application for social security card-used to obtain new social security card or have card reissued |
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W-4 |
EEs with holding allowance certificate Must be kept four years |
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1040 |
U. S. Individual income tax return |
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Imputed income |
Represents the value of the benefits employees receive from from the employer and must be included in employees income aka fringe benefits |
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Optional flat rate withholding |
25% FIT for supplemental wages |
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Mandatory flat rate method |
39.6% of supplemental wages over $1000000 |
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Common control |
When determining whether payments are regular or supplemental wages in a year exceed $1mllion an er must consider wage payments made to ee by any other er treated as a single er with the first er |
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Aggregate method |
Must use this method when calculating FIT for supplemental wages when an EE has no federal income tax withheld from regular wages (when it does not excess a million) |
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SS maximum for EE and ER |
$7254 |
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Aggregate method |
Must use this method when calculating FIT for supplemental wages when an EE has no federal income tax withheld from regular wages (when it does not excess a million) |
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SS maximum for EE and ER |
$7254 |
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Form 4070 |
Employees report of tips to employer |
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SS maximum for EE and ER |
$7254 |
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Form 4070 |
Employees report of tips to employer |
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CCPA |
Costumer Credit Protection Act Provide legal framework around which state child support withholding laws are constructed |
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Maximum Amount to Withhold for Child Support |
50% of the EEs disposable earnings of EE is supporting another spouse or children 60% if the EE is not supporting Amts increase to 55% and 65% is in arrears |
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When do child support orders take effect |
No later than the first pay period that begins after 14 working days following the mailing of the notice to withhold to ER |
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Form 668-W |
Notice of Levy on wages, salary, and other income. Instructs employers to remit amounts withheld for the levy on the same day wages are paid to the EE |
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Form 668-D |
Release of Levy/release of property from levy |
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Form 2159 |
Payroll deduction agreement |
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Creditor Garnishment limit |
25% of the EEs disposable for the week or the Amt by which the ee disposable earnings for the week exceed 30 tones the federal minimum hourly wage then in effect |
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Student loan garnishment maximum |
15% of EEs disposable earnings or the excess of earnings over 30 times fed min wage |
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Priorities of withholding disorders |
Child support Bankruptcy Federal administrative garbishments Federal tax levies Student loan State tax levies Local tax leviea Creditor garnishments Employer deductions Employee voluntary deductions |
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Non taxable benefits |
No additional cost services Qualified EE discounts Working condition fringes DE minimise fringes Qualified transportation benefits On premises athletic facilities Qualified retirement advice Qualified moving expense reimbursements
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Highly compensated employees |
5% owner of the employers stock or capital at any time during the current or preceding year; or received more than $115000 in compensation from the employer during the preceding year |
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Qualified EE discounts |
Discounts on goods cannot exceed the gross profit percentage when goods are sold to customers Discount on services cannot exceed 20% of the price at which services are offered to customers |
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Distance test |
New workplace must be at least 50 miles farther from old workplace(old residence if no workplace) |
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Distance test |
New workplace must be at least 50 miles farther from old workplace(old residence if no workplace) |
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Time test |
During 12 month period immediately following move the er must expect EE to work full time at least 39 weeks in the general location of the workplace |
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Two types of deductible moving expenses |
Transportation of household goods Expense from traveling from old home to New home. |
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Two types of deductible moving expenses |
Transportation of household goods Expense from traveling from old home to New home. |
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Mileage rate for moving expenses |
.235 per mile |
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Moving expenses listed on w-2 |
Box 12 code p |
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Prizes for retail sales people |
Non cash prizes awarded to retail salespeople paid solely on a commission basis for exceeding or seeking quotas. Ers do not have to withhold federal income tax from such prizes although they must be reported on w-2. Subject to FICA and Futa |
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Prizes for retail sales people |
Non cash prizes awarded to retail salespeople paid solely on a commission basis for exceeding or seeking quotas. Ers do not have to withhold federal income tax from such prizes although they must be reported on w-2. Subject to FICA and Futa |
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General valuation method |
The fair market value of a company provided vehicle is the amount an individual would pay to lease the same or comparable vehicle in an arms length transaction in the same geographic area for the same length of time |
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Special valuation methods |
Commuting valuation Annual lease valuation Vehicle cents per mile valuation |
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Commuting valuation method |
Allows ER to value an EEs personal commuting use of an ER provided vehicle at $1.50 per one way commute amd $3 per round trip |
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Annual lease value method |
The fair market value of EEs personal use of company provided cars is determined by multiplying the annual lease value of the car by the percentage of personal miles driven |
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Vehicle cents per Mile method |
.56 cents per Mile |
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Qualified deferred compensation plans |
Meet requirements of IRS regulations 401k 403b-educational institutions and non profits |
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Qualified deferred compensation plans |
Meet requirements of IRS regulations 401k 403b-educational institutions and non profits |
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Non qualified deferred compensation plans |
Do not meet requirements of IRS regulations. They provide EEs with some of the benefits Osvaldo qualified plan by delaying taxation for federal invoke tax purposes but there is more risk of loss of the deferrals and severe restrictions for deferrals amd distributions from the plan 457 be plan |
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Semi weekly depositers Saturday Sunday Monday and Tuesday deposit... |
The next Friday |
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Semi weekly depositers Saturday Sunday Monday ANS Tuesday deposit... |
The next Friday |
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Semi weekly depositors Wednesday Thursday and Friday pay days deposits are due... |
The next Wednesday |
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Semi weekly depositers Saturday Sunday Monday ANS Tuesday deposit... |
The next Friday |
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Semi weekly depositors Wednesday Thursday and Friday pay days deposits are due... |
The next Wednesday |
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Shortfall rule |
An employer satisfies its deposit obligation if the Amt of the shortfall is no more than the greater of $100 or 2% of the entire Amt due so long as the original deposit was made timely and the shortfall is deposited by the appropriate makeup date |
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EFTPS |
Electric federal tax payment system Most employers are required to make federal tax deposits using EFTPS All organizations are enrolled in EFTPS when an ein is issued |
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941-x |
Adjusted employers quarterly federal tax return |
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W-3 |
Transmittal of wage and tax statements |
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Reflective listening |
Restating what you understand from others statements |
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Purpose of labor distribution |
Payroll expenses are allocated to the job function that the employee worked |
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Which deferred compensation plans generally do not contain equal benefits for all EEs |
Non qualified |
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What journal entries are required to record $250000 in salaries earned during the last week of July but not paid until the first Friday in August ? |
Debit accrued salary expense; credit accrued salary expense |
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How is a file 940 corrected |
By filing an amended 940 |
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Futa taxes over $500 must be deposited... |
Quarterly |
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A non exempt EE is provided room and board. Under Flsa the employees regular rate of pay calculation includes... |
100% of the fair market value of the room and board |
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A non exempt EE is provided room and board. Under Flash the employees regular rate of pay calculation includes... |
100% of the fair market value of the room and board |
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The shortfall make up deposit must be made for a semi weekly depositor by the... |
First Wednesday or Friday on or after the 15th of the next month or due date of the return whichever is earliest |
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When filing paper forms w-2 the due date to the SSA is |
Jan 31 |
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EE provides new form w-4 on August 15th. The Employer must retain the prior form w-4 until... |
Four years after the last tax return was filed using the info on the w-4 |
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TIN and name reported on 1099 form can be checked by using the |
IRSs Tin Matching System |
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What penalty may be assessed against a company that files its forms w-2 electronically with the SSA on May 15? |
$60 per w-2 |
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To correct a direct deposit payment made in error within 5 banking days the Employer must generate a... |
Single entry reversal |
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A procedure that can be put into place instead one person payroll department to ensure adequate controls is to... |
Have the accounting department reconcile the payroll bank account |
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An ER only paid 98% of its tax liability by the due date of Feb 15 when is remaining 2% due |
By due date of the quarterly form 941 |
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EEs who are eligible foe direct deposit and receive paychecks sent through the mail are constructively paid |
When the checks are delivered |
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Futa tax credit |
5.4% |
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401k is subject to to which taxes |
Social security Medicare and Futa |
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How may Fit be withheld from desperation pay and accrued vacation wages totaling $20000 that are paid at the time of termination and identified separately from EEs pay stub? |
Using supplemental rate or aggregate method |
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An ER owes $750 in Futa taxes for the first quarter. When is the Futa tax due? |
April 30 |
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If an EE is unable to collect As and Medicare on an EEs reported tip income the employer must |
Report under withheld amts in Box 12 codes A and B |
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Wages paid in the same year after an EEs death but issued after the EEs death are subject to what taxes |
Social security Medicare and Futa |
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An ER files both 941 and 943 for workers. At the end of the year he will report wages to SSA with |
2 separate w-3s |
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Primary advantage of developing an in house system |
Employer controls entire computer system |
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The FMLA requires ERs to maintain records for |
3 years |
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When checking for phantom employees which of the following actions should be taken? |
Have employees pick up checks/direct deposit advices and show identification |
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A record of the financial transactions account is a |
Ledger |
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A record of the financial transactions account is a |
Ledger |
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A record of daily transactions of a business is a |
Journal |
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An example of employment data element contained in the master file is |
Hourly rate of pay |
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Payroll documentation ensures that procedures are followed True or false |
False |
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How would an increase to an asset account be posted |
Debit |
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Unacceptable to an external audit officer |
Storage of blank payment checks in the payroll department |
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Statue of ministries correcting a form 941 is |
April 15th three years after the close of the tax year error was made |
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Who distributes EFTPS payments to the receiving financial institutions |
ODFI |
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457b |
Common retirement plan for state/city/local government EEs |
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Qualified parking limit |
250 |
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Qualified parking limit |
250 |
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Qualified transportation |
$130 |
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Cafeteria benefits include |
Accident and health insurance Gtl short and long term disabilitu HSA and FSA accounts Elective vacation days Adoption assistance Dependent care Qualified deferred comp plans |
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Accuracy related penalties |
20% of the under payment, 75% of under payment if due to fraud |
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Failure to make timely deposits |
2% 1-5 days late 5% 6-15 10% 16+ |
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Statutory EEs - dish |
Drivers Insurance sales person Salesperson Homeworkers Fit is blocked FUTA only paid on drivers ANS traveling sales |
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Statutory Non EEs - sit and read |
Sitters Real estate agents Direct sellers Treated as 1099s |
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Law enforcement OT |
6.11 |
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Fire protection OT |
7.57 |
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What determines the tax liability of an off cycle check? |
When the Weather receives the check |
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When does a depositer status change because the $50000 threshold during the look back period has been exceeded |
Annually |
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Primary purpose of batch controls is to |
Validate entry accuracy |
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Federal unemployment taxes are used to fund |
The administration of the unemployment insurance program |
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Cafeteria benefits do not include |
Educational assistance DE minimis fringes Rides in commuter vans Employee discounts Qualified transportation fringes Non qualified retirement plans |
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OSHA documents |
Retention period: 5 years Work related illness/injury/ accident documents |
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IRS /SSA/ Futa documents |
Retention: 4 years Copies of tax filings Voided checks Earnings records W-4 3PSP records |
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Flsa /irca documents |
Retention: 3 years EE information Hours worked Earnings I-9 |
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FMLA documents |
Retention: 3 years Dates of FMLA leave Documentation of FMLA leave FMLA plan description Dispute records |
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Supplemental records |
Retention: 2 years Time cards Wage rate tables Work schedules |
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Direct deposit process flow |
Originator-ODFI-ach-receiver-rdfi |
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ODFI |
Originating depository financial institution (employers bank) |
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Rdfi |
Receiving depository financial institution (employees bank) |