Withholding and Depositing Trust Fund Taxes

Principals of Payroll Administration

Chapter 7 – Withholding and Depositing Trust Fund Taxes

1.Explain the term “trust fund taxes”.

2. What is the employees Social Security wage base, the Social Security and Medicare tax rate for incomes both over and under $200,000 in wages?

3. What is the corresponding employer rate on the above?

4.What is the corresponding self-employment tax rate on the above?

5. Who pays Federal Unemployment Tax and what is the rate, the maximum state credit and the wage base?

6. What is an EIN and what form is used for application?

7. What is EFTPS?

8. What is the constructive receipt doctrine?

9. What is the claim of right rule?

10. Certain groups of workers are exempt from withholding of Social Security and Medicare but are subject to self-employment tax. Which groups potentially meet this requirement?

11. Tables to determine the amount of federal income tax to be withheld can be found in which IRS publication?

12. What is Form W4 and who must complete one? What is the employers responsibility if the employee does not provide one?

13. Calculate the federal income tax withholding amount for both the Wage Bracket Method and the Percentage Method for the following:
Biweekly pay period
Married employee – 2 withholding allowances
$2500 taxable wages in pay period

Wage Bracket Method Percentage Method

14. Explain the tax deposit date requirements of:
1. Quarterly depositors
2. Monthly depositors
3. Semi weekly depositors
4. Next day rule
15. What is the Trust Fund Recovery Penalty, who can be liable and what is the penalty percentage? The Trust Fund Recovery Penalty investigation seeks to discover _______________ and ________________.

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