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
The sole purpose of Social Security taxes is to provide retirement benefits to employees.
Taxable earnings for Social Security tax are always the same as taxable earnings for federal income tax withholding.
Collectively, Social Security tax and Medicare tax are referred to as FICA taxes.
The income threshold for Medicare tax indicates the income level above which no Medicare taxes are levied.
Employees are required to contribute toward the purchase of disability insurance in all 50 states.
The contribution limit for a SIMPLE IRA is lower than that for a 401(k) or 403(b).
ERISA is a set of regulations that dictate the manner in which a cafeteria plan may be administered.
Flexible spending accounts contain a use it or lose it feature that, although relaxed in recent years, limits the time over which the account’s funds may be utilized.
Certain withholding amounts are disregarded when determining net pay.
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 Stinson’s filing status is married filing jointly. He earns $174,000 during the year.
Jeanette Yancy’s filing status is head of household. She earns $194,000 during the year.
Keanu Levine’s filing status is married filing separately. He earns $132,000 during the year.
$6,000 and 2.35%
$6,000 and 0.9%
$56,000 and 2.35%
$56,000 and 0.9%
403(b)
Payroll Deduction IRA
401(k)
SIMPLE IRA
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
$13,000
$19,000
$6,000
$7,000
State Income tax withholding
Voluntary Withholdings
Social security
Medicare
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