The sole purpose of Social Security taxes is to provide retirement benefits to employees.

True

False

The Social Security wage base for 2019 is $132,900.

True

False

Taxable earnings for Social Security tax are always the same as taxable earnings for federal income tax withholding.

True

False

Collectively, Social Security tax and Medicare tax are referred to as FICA taxes.

True

False

The income threshold for Medicare tax indicates the income level above which no Medicare taxes are levied.

True

False

Employees are required to contribute toward the purchase of disability insurance in all 50 states.

True

False

The contribution limit for a SIMPLE IRA is lower than that for a 401(k) or 403(b).

True

False

ERISA is a set of regulations that dictate the manner in which a cafeteria plan may be administered.

True

False

Flexible spending accounts contain a use it or lose it feature that, although relaxed in recent years, limits the time over which the accounts funds may be utilized.

True

False

Certain withholding amounts are disregarded when determining net pay.

True

False

Which of the following statements regarding Social Security tax is false?

Social Security tax was first levied on employees in 1937.

Contributions to cafeteria plans are not taxable for Social Security tax.

All earnings of an employee that exceed the taxable wage base in a single year are not subject to Social Security tax

Social Security tax is also referred to as OASDI tax because it was initially established to benefit retired employees, survivors of employees, and disabled employees.

Which of the following is taxable for Social Security tax?

Contributions to a dependent care flexible spending account

Contributions to a 403(b) plan

Contributions to a cafeteria plan

Contributions to a flexible spending account

How much Social Security tax would be owed by an employee who has taxable earnings for Social Security tax of $2,000, and who, prior to the current pay period, has earned $132,600 of taxable earnings for Social Security tax?

$0

$18.60

$105.40

$124.00

The Additional Medicare Tax is paid on a portion of employee earnings by which of the following individuals?

Carolyn Hughes filing status is qualifying widow. She earns $187,000 during the year.

Joe Stinsons filing status is married filing jointly. He earns $174,000 during the year.

Jeanette Yancys filing status is head of household. She earns $194,000 during the year.

Keanu Levines filing status is married filing separately. He earns $132,000 during the year.

If an individual whose filing status is single earns $256,000 during the year, what portion of the earnings are subject to Additional Medicare Tax, and what is the total (standard and Additional) Medicare Tax rate that will be applied to these earnings?

$6,000 and 2.35%

$6,000 and 0.9%

$56,000 and 2.35%

$56,000 and 0.9%

Contributions to which of the following retirement plans are subject to federal income tax withholding?

403(b)

Payroll Deduction IRA

401(k)

SIMPLE IRA

Which of the following is not a retirement plan?

SIMPLE IRA

Flexible spending account

403(b)

401(k)

Which of the following is not a voluntary deduction from gross earnings?

Payroll deduction IRA

Union dues

Cafeteria plan

State disability insurance

Assuming that taxable earnings are $51,200 for a 44-year-old individual, which of the following is the contribution limit applicable to a Payroll Deduction IRA?

$13,000

$19,000

$6,000

$7,000

Which of the following payroll register columns can contain a combination of multiple withholding amounts?

State Income tax withholding

Voluntary Withholdings

Social security

Medicare