FPC Certification Exam Review: Questions and Answers, Exams of Business and Labour Law

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FLSA - correct answer Fair Labor Standards Act Journal - correct answer Debits and credits to a specific ledger accout Is batch processing interactive? - correct answer No By when must employers inform employees to submit a new W-4 if marital status or # of allowances have changed? - correct answer December 1st Are non qualified deferred compensations plans subject to contribution limits? - correct answer No What plans are subject to contribution limits? - correct answer 401K, 457b, 403b What form is used to correct mistakes done on form 941?

• correct answer Form 941-X

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How many billing cycles does an employer have to update their payroll for changes to employee's W-4? - correct answer Two billing cycles (?) The ability of a payroll department to provide accurate paychecks on a timely basis is an example of the customer service principle of ___________. - correct answer Reliability FUTA - correct answer Federal Unemployment Tax Act Common Law Test is made up of what three things? - correct answer behavioral control, relationship of the parties, financial control What are criteria used in calculating an employees federal income tax? - correct answer # of allowances, pay frequency, marital status Tangibles that a payroll department displays are: - correct answer Physical facilities, organization, appearance of the payroll staff

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If an employee's spouse passes away, when must the employee submit an amended W-4? - correct answer January 1st of the following year What pay is considered discretionary? - correct answer Holiday pay The payment of a creditor's wage garnishment withheld from the employee's wage will decrease both the _________ and _____________. - correct answer assets, liabilities How frequently does federal law require master files to be updated? - correct answer There are no federal requirements for frequency of updates FUTA taxes of more than $500.00 on wages paid in the first quarter must be deposited by when? - correct answer April 30th Under FLSA, a record of employees must be retained for how long? - correct answer Two years

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TRUE or FALSE: Under deposited payroll tax liability is subject to penalties for late deposit even if corrected within five days. - correct answer TRUE Under FLSA white collar exemption rules, an exempt executive employee must meet the following criteria: - correct answer Managing a recognized department, Directing the work of two or more full time employees, Being paid a weekly salary of at least $455.00. In what order does an employee need to withhold deductions for health insurance and union dues? - correct answer Any order the employee chooses Form W-9 - correct answer Request for Taxpayer Identification Number and Certification What must an employer do if an independent contractor fails to provide a TIN? - correct answer A 28% backup withholding tax on nonwage payments is withheld if the payee has failed to provide a Taxpayer Identification Number (TIN) or the IRS has notified the payer that the TIN is incorrect.

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What is form 945? - correct answer Backup withholding is treated separately from payroll withholding. It is deposited separately and reported separately on Form

The initial determination of whether a worker is an employee or an independent contractor is made by the: - correct answer employer

• correct answer The employer's only obligation is to give the contractor a completed Form 1099-MISC when paying the contractor $600 or more during the calendar year (see Tax Tables and Forms in the Online Resource Center) at the end of the year. What is included on form 1099-MISC? - correct answer Form 1099-MISC states how much the contractor was paid for services rendered during the past calendar year. A copy of this form must also be sent to the Internal Revenue Service (IRS). When must an employer provide a contractor with a 1099-MISC? - correct answer when paying the contractor $600 or more during the calendar year and at the end of the year.

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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 another company in the same industry indicating similarly situated workers are independent contractors. B. showing at least 25% of its industry treats similarly situated workers as independent contractors. C. information from published IRS rulings. D. a private letter ruling issued to the company indicating the worker is an independent contractor. - correct answer A. a private letter ruling issued to another company in the same industry indicating similarly situated workers are independent contractors. What is Form SS-8 - correct answer Determination of Worker for purposes of federal employment taxes and income tax withholding. Reasonable Basis Tests (Safe Harbor Rules) - correct answer Court decisions, published IRS rulings, IRS technical advice sent to the employer, or a private letter

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ruling from the IRS to the employer indicating that the worker is not an employee A past IRS audit of the employer that did not result in a finding of taxes owed or a penalty attributable to the employer's treatment of the worker as an independent contractor (audits occurring after December 31, 1996, may not be relied on unless they include an employment classification audit of the worker involved or the audit of a similarly situated worker) Guidance from an attorney or CPA who know the business A long-standing, recognized practice in a significant segment of the employer's industry of treating workers in similar situations as independent contractors Where is reasonable basis defined in IRS tax code? - correct answer Safe Harbor Rules are defined under the Revenue Act of 1978. T/F: If a Form W-2, Wage and Tax Statement was filed for the worker or if the worker received benefits under the employer's benefit plans, the worker is classified as an employee. - correct answer True

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Common Law Test for determining whether a worker is an independent contractor? - correct answer Sets own hours, determines own sequence of work Can work for multiple employers, services available to the public Is self Employed A contract governs how the relationship can be severed Works by the job Permitted to employ assistants Performs services under the workers business name Payment by the job; opportunity for profit and loss Furnishes own tools, equipment and training; substantial investment by worker Controls the sales process and terms What can discriminate in favor of highly compensated employees? - correct answer non qualified deferred compensation plans What is the 2016 maximum taxable wage for medicare. - correct answer No maximum taxable medicare wage

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HIPPA sets standards for the protection of - correct answer Health Information To calculate the maximum amount to withhold for child support , an employer uses the employee's - correct answer disposable pay An employee submits an amended W-4 on January 2, How long must the previous W-4 be retained for? - correct answer fours years after the date the last tax form was filed using the W-4 information What is one step in annual reconciliation? - correct answer Verification of federal wages In annual reconciliation during verification of federal wages can be done by comparing what fields on what form? - correct answer Form W-2, Box 1, to Form 941, Line 2 Form 941 and 941-X - correct answer Forms where an Employers tax liability is reported

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An asset would be - correct answer amounts due from customers When calculating en employee's regular pay which of the following type of compensation must be included? - correct answer Fair market value of noncash compensation DOL - correct answer department of labor DOL requires employee's time records be captured - correct answer in a manner that is accurate and readable What is EFTPS? - correct answer Electronic Federal Tax payment System How do employers deposit federal income, Medicare and SS taxes? - correct answer using EFTPS What is an example of a liability? - correct answer Garnishment held but no yet paid

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Reflective listening is the skill of - correct answer restating what you think someone else said A catch up contribution to a qualified deferred compensation plan is reported on Form W-2 in box - correct answer 12 Eligibility to work in the US is verified by the - correct answer employer A semi weekly depositor that has a payroll tax liability of 80,000 from a Thursday payroll must deposit the liability by - correct answer Wednesday When is the deposit due for Semi weekly depositors with pay days on Saturday, Sunday, Monday, and Tuesday? - correct answer The next Friday When is the deposit due for Semi weekly depositors with pay days on Wednesday, Thursday, and Friday? - correct answer The next Wednesday

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For semi weekly depositors, amounts withheld from payments made on a Monday must be deposited by the following - correct answer following Friday What account will have a debit balance? - correct answer Asset Under federal regulations, the documents that have a minimum four year retention requirement are? - correct answer copies of tax returns A liability would be - correct answer mortgage on teh building The principle of constructive receipt determines - correct answer when wages are taxable What is the maximum amount that can be contributed to a nonqualified deferred compensation plan that is not a 457b plan - correct answer There is no limit