Click here to return to the Practice Exam home page

Payroll - Practice Exams

Chapter 3 - Social Security Taxes

1. Form 941 Practice Problem #1 – with no Advance EIC Problem
   Goodacordian Music Repair, 1111 Music Row, Accordianville, TN 75321Information: EIN 32-1234567; 
   Employees are paid bi-weekly; and all deposits have been made in a timely manner; 
   This is for the 2nd quarter; The first payday of the quarter was on Monday, 4/2/00

(Required: Complete a Form 941 signed by Jane Goodsound, the owner). 

2. (A). Form 941 Practice Problem #2 – with no Advance EIC Problem
   Darwin's Auto Repair, 65743 128th, Renton, WA 98509
   Information: EIN 57-5467321; Employees are paid bi-weekly; and all deposits have been made in a timely manner; 
   This is for the 4th quarter; The first payday of the quarter was on Monday, 10/12/00

(Required: Complete a Form 941 signed by George Darwin, owner).

2   (B)  Form 941 Practice Problem #2 – with no Advance EIC Problem
Holman Inc., 12345 6th, Renton, WA 98509
Information: EIN 57-5467321; Employees are weekly; and all deposits have been made in a timely manner; the OASDI limit is $84,600; employee earnings are the same every pay period of the year.
This is for the 4th quarter; The first payday of the quarter was on Monday, 10/05/00

(Required: Complete a Form 941 signed by George Darwin, owner). 

3. Using an OASDI ceiling of $84,600, calculate the OASDI taxes to withheld when you earn $500 this week and your previous earnings totaled $25,000.

4. Using an OASDI ceiling of $84,600, calculate the HI tax to be withheld when you earn $500 this week and your previous earnings totaled $25,000.

5. Using an OASDI ceiling of $84,600, calculate the OASDI taxes to withheld when you earn $500 this week and your previous earnings totaled $84,400. 

6. Using an OASDI ceiling of $84,600, calculate the HI tax to be withheld when you earn $500 this week and your previous earnings totaled $84,400. 

7. Using an OASDI ceiling of $84,600, calculate the OASDI taxes to withheld when you earn $500 this week and your previous earnings totaled $85,400. 

8. Using an OASDI ceiling of $84,600, calculate the HI tax to be withheld when you earn $500 this week and your previous earnings totaled $85,400. 

9. Using an OASDI ceiling of $84,600, calculate the OASDI taxes on self-employment income of $25,000 when your employee earnings were $30,000. 

10. Using an OASDI ceiling of $84,600, calculate the HI taxes on self-employment income of $25,000 when your employee earnings were $30,000. 

11. Using an OASDI ceiling of $84,600, calculate the OASDI taxes on self-employment income of $25,000 when your employee earnings were $84,000. 

12. Using an OASDI ceiling of $84,600, calculate the HI taxes on self-employment income of $25,000 when your employee earnings were $84,000. 

13. Using an OASDI ceiling of $84,600, calculate the OASDI taxes on self-employment income of $25,000 when your employee earnings were $87,000. 

14. Using an OASDI ceiling of $84,600, calculate the HI taxes on self-employment income of $25,000 when your employee earnings were $87,000. 

15. Using an OASDI ceiling of $84,600, calculate the OASDI taxes on self-employment income of $87,000 when your employee earnings were $25,000. 

16. Using an OASDI ceiling of $84,600, calculate the HI taxes on self-employment income of $87,000 when your employee earnings were $25,000. 

17. Using an OASDI ceiling of $84,600, calculate the OASDI taxes for week 40 when paid a weekly salary of $2,110. 

18. Using an OASDI ceiling of $84,600, calculate the HI taxes for week 40 when paid a weekly salary of $2,110. 

19. Using an OASDI ceiling of $84,600, calculate the OASDI taxes for week 41 when paid a weekly salary of $2,110. 

20. Using an OASDI ceiling of $84,600, calculate the HI taxes for week 41 when paid a weekly salary of $2,110. 

21. Using an OASDI ceiling of $84,600, calculate the OASDI taxes for week 42 when paid a weekly salary of $2,110. 

22. Using an OASDI ceiling of $84,600, calculate the HI taxes for week 42 when paid a weekly salary of $2,110. 

23. Use an OASDI ceiling of $84,600. Calculate the OASDI taxes when you report January tips of $400 and on the next payday you are paid regular wages of $300

24. Use an OASDI ceiling of $84,600. Calculate the HI taxes when you report January tips of $400 and on the next payday you are paid regular wages of $300.
    
    True/False

25. The Federal Insurance Contribution Act allows taxes on self-employment earnings.

26. Employers pay taxes on payments to independent contractors 

27. Generally, government workers are not taxed for FICA. 

28. Form 941 is due no later than the 15th day of the month following the end of a quarter. 

29. Dismissal pay is considered taxable wages. 

30. Semiweekly depositors who pay wages on a Wednesday must make the deposit by Thursday. 

31. The FICA taxable wage base is higher for an employer than an employee. 

32. Sick pay is not considered taxable wages for FICA 

33. Vacation pay is not considered taxable wages for FICA 

34. Employers must use Form 4070 to report tip income. 

35. Employers can use Form 4070 to report tip income. 

36. Curt Holman should not be taxed because he is a good guy and needs the money. 

37. Meals provided for the convenience of the employee are not taxable for FICA. 

38. Educational assistance for an accountant to attend a golf school is not taxable if it helps him/her be better prepared to meet with clients. 

39. Partners who receive a salary in a partnership are taxed only on the salary they receive. 

40. The FICA taxable wage base is adjusted each year. 

41. If you report more than $50,000 in a lookback period, you will be considered a monthly depositor. 

42. Employers use Form 940 to file their quarterly return of FICA and FIT taxes. 

43. There is no penalty if you choose to not pay taxes on time. 

44. Most workers in a non-profit company are not taxable under FICA.

45. Taxes authorized under the Social Security Act are: 

    a. Not legal 

    b. Optional 

    c. Both OASDI and HI 

    d. Taxes on employees 

    e. Taxes on employers 

    f. Taxes on self-employed persons 

    g. None of the above 

    h. Both "c" and "e" 

    i. Both "d" and "e" 

    j. Both "c" and "d"

    k. "c", "d", "e", & "f" 

46. Which of the following is Exempt from FICA taxes? 

    a. Curt Holman 

    b. Partners in a partnership 

    c. John Newcome 

    d. President Bush 

    e. CEO's 

    f. CFO's 

47. Which of the following is Exempt from FICA taxes? 

    a. Curt Holman 

    b. Military base pay during time of combat 

    c. John Newcome 

    d. President Bush 

    e. CEO's 

    f. CFO's 

    g. Service provided by your 16 year old daughter hired by her father in their grocery store. 

48. The FICA tax rate is: 

    a. 6.2% for OASDI 

    b. 1.45% for HI 

    c. 12.4% for OASDI 

    d. 2.9% for HI

    e. Both "a" and "b"

    f. Both "c" and "d"

    g. Whatever you want it to be.

    h. Not legal according to the Supreme Court

    i. None of the above

ANSWER KEY 

Question	Answer	Question	Answer	Question	Answer
1	Total deposits =$7,182.35; Line 9 = - $ .04	21	0	41	F
2(A)	Total deposits = 8,840.46; Line 9 = $ .02	22	2110*.0145=30.60	42	F
2(B)	Total deposits = 8,279.31; Line 9 = -$ .07
3	500*.062=31.00	23	700*.062=43.40	43	F
4	500*.0145=7.25	24	700*.0145=10.15	44	F
5	(84600-84400)*.062=12.40	25	F	45	K
6	500*.0145=7.25	26	F	46	B
7	0	27	F	47	G
8	500*.0145=7.25	28	F	48	E
9	25000*.124=3100.00	29	T
10	25000*.029=725.00	30	F
11	(84600-84000)*.124=74.40	31	F
12	25000*.029=725.00	32	F
13	0	33	F
14	25000*.029=725.00	34	F
15	(84600-25000)*.124=7390.40	35	T
16	87000*.029=2523.00	36	T
17	2110*.062=130.82	37	F
18	2110*.0145=30.60	38	F
19	(84600-84400)=.062=12.40	39	F
20	2110*.0145=30.60	40	T