Semi Weekly Depositor J4. Taxable for FICA A5. Non Taxable for FICA I6. Self-Employed’s FICA Tax Rates C7. Form 941 B8. Monthly Depositor G9. Taxable Wage Base F10. Form SS-5 CHAPTER 3 Review Questions 1. If the person employs 1 or more individuals for performances of services in the US unless such services or employment are specifically exempt by law. 2. Defined by the common-law relationship of employer/employee 3. If the business has the right to tell a worker how, when, and where to work 4. a person who follows an independent trade, business, or profession.
Where they offer their services to the public the following is the “test”: Hire, supervise, & pay assistants Determine the sequence of their work Set their own hours Work for as many employers as they wish Are paid by the job Make their services available to the public Have an option for profit or loss Furnish their own tools Have a substantial investment in their trade May be dismissed only under terms of a contract 5a. They must collect the employee’s FICA tax on tips that each employee reports. Then deduct the FICA taxes from other wages due to the employee 5b.
Employers are liable for their share of the FICA tax on any tips subject to the employees FICA tax 6. After 6 months of consecutive calendar months the sick pay is not taxed. Period off work MUST be consecutive any return to work restarts the 6 month count. 7. They are subject to FICA tax but the employer’s match portion is tax free. 8. YES!!!! The amount of over payment is credited against the employee’s federal income tax for the year. Instructions are given on the Individual Income Tax Return (Form 1040) that explain how the over payment should be treated. So file your taxes John!!! 9a. 3. 3 % 2013-Projected 10. 4% for OASDI 2. 9% for HI b. Usually the net business income of individual as shown in their income tax returns make up their net earnings from self employment for the purpose of the social security act. The max taxable income for an individual is $110,100 for OASDI but for HI the total income is taxable 10. The EIN’s can be obtained directly from the IRS website. No registration is required and the EIN is recognized by the IRS immediately or they can call the IRS or mail or fax the SS-4 (Application for EIN) 11. The requirements are based on the “lookback” period.
The amount of employment tax the employer reported on the quarterly returns for the 4 quarters in the lookback period determines if they are a monthly or semi monthly depositors. Each Nov. the IRS notifies employers weather they will be monthly or semimonthly depositors. 12. Pretty much all employers except those with a $2,500 or less in ? tax liabilities that pay when they file their returns. 13. Generally by touch tone phone, personal computer, or online 14. Generally 3 months of each calendar year 15a. A certain % of the amount of tax required to be reported will be added to the tax. . 5% of the undeposited taxes c. 2% of the amount (if less than $1,250 then penalty is $25 or the amount of the check, whichever is less) Practical Problems A (please see the Excel file for the rest of the problems and then I am mailing in the forms used for problems 3-11A, 3-12A, 3-13A, 3-14A, & 3-15A) 3-15A LO4,5 b. 1. Jan. 182. Feb. 63. Feb. 204. Mar. 65. Mar. 20 6. Apr. 3 3-16A LO5 1. Apr. 15 2. a250. 52505 * 10% = 250. 50 b. 12. 532505 * ? % = 12. 53 c. 3. 712505 * 3% * (18/365) = 3. 7118 days late d. 266. 74 Total Penalty Imposed