Question

1. Which of the following is not subject to self-employment tax?
a. Net earnings of the owner of a shoe store
b. Net earnings of a self-employed lawyer
c. Distributive share of earnings of a partnership
d. Gain on the sale of real estate held for investment
e. Net earnings of the owner of a dry cleaner
2. The FUTA tax is:
a. An unemployment tax with a rate of 2.9 percent up to $117,000 of salary per employee.
b. A disability tax with a rate of 2.9 percent up to $7,000 of salary per employee.
c. An unemployment tax with a rate as low as 0.6 percent up to $7,000 of salary per employee.
d. A disability tax with a rate of 0.6 percent up to $117,000 of salary per employee.
3. Bob employs a maid to clean his house. He pays her $1,900 during the current year. What is the proper tax treatment of the FICA and Medicare tax for the maid?
a. None of the $1,900 is subject to FICA or Medicare tax.
b. The $1,900 is subject to the Medicare tax, but not the FICA tax.
c. $500 is subject to the FICA and Medicare tax.
d. The entire $1,900 is subject to the FICA and Medicare tax.
4. Which of the following employees would not be exempt from the FICA and Medicare taxes on wages paid for household work?
a. The taxpayer’s 20-year-old sister
b. The taxpayer’s wife
c. The taxpayer’s 16-year-old daughter
d. The 14-year-old babysitter from down the street
5. Individual taxpayers may pay withholding taxes due with their individual income tax returns using Schedule H for each of the following workers except:
a. A nanny hired to watch their children.
b. A maid hired to clean house and cook every day.
c. An attorney with her own business, hired to handle a legal dispute with the taxpayers’ neighbor.
d. An unlicensed caregiver for a disabled spouse.
6. Skylar is single and earns $400,000 in salary during 2014. What is the amount of Medicare surtax for high-income taxpayers that his employer must withhold from his wages?
a. $3,600
b. $1,800
c. $1,350
d. $900
7. Christine and Doug are married. In 2014, Christine earns a salary of $250,000 and Doug earns a salary of $50,000. They have no other income and work for the same employers for all of 2014. How much Medicare surtax for high-income taxpayers will Christine and Doug have to pay with their 2014 income tax return?
a. $450
b. $900
c. $2,700
d. None


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  • CreatedJuly 16, 2015
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