1. How is the amount of a fringe benefit that is taxable to an employee determined?
2. To what extent are cash tips treated as remuneration subject to federal income tax withholding?
3. For each of the following kinds of wage payments, indicate whether or not the wages are exempt from the withholding of federal income taxes:
a. Three weeks’ vacation pay.
b. Weekly advance to a sales representative for traveling expenses to be incurred.
c. Weekly wages paid the housekeeper in a college fraternity.
d. Monthly salary received by Rev. Cole Carpenter.
e. Payments under a worker’s compensation law for sickness or injury.
4. What is the maximum contribution that an employer can make to an employee’s SIMPLE account?
5. What is the maximum amount that an employee can shelter into a 401(k) plan?
6. What is a personal allowance? What was the amount of a personal allowance for 2012?
7. Orrin D’Amato, single, participates in his firm’s pension retirement plan. This year, his modified adjusted gross income will be about $70,000. How much of his compensation may D’Amato contribute to an IRA this year without paying federal income taxes on the contribution?
8. Are employer contributions into employees’ health savings accounts taxed as earnings of the employees?
9. Under what conditions may employees be exempt from the withholding of federal income taxes during 2012? How do such employees indicate their no-taxliability status?
10. How is the special period rule for the reporting of fringe benefits applied?
11. Commencing in June, Alan Oldt is eligible to receive monthly payments from a pension fund. What procedure should Oldt follow if he does not wish to have federal income taxes withheld from his periodic pension payments?
12. Rhonda Gramm is single, and her wages are paid weekly. Under the percentage method, what is the amount of Gramm’s one weekly withholding allowance? Howard Heinz, married, claims two withholding allowances, and his wages are paid semimonthly. What is the total amount of his semimonthly withholding allowances?
13. What formula is used to ‘‘gross-up’’ supplemental payments in order to cover the taxes on the supplemental payments?
14. Trowbridge Company has just completed the processing of its year-end payroll and distributed all the weekly paychecks. The payroll department is now computing the amount of the annual bonus to be given each worker. What methods may be used by the company in determining the amount of federal income taxes to be withheld from the annual bonus payments?
15. What is Form 944?
16. Why must some employers file Form 1096?
17. What is the penalty for filing W-2s with mismatched names and social security numbers?
18. What are the penalties imposed on employees for filing false information on Form W-4?
19. Under what conditions must employers submit copies of Form W-4 to the IRS?