HOW EMPLOYERS WITHHOLD AND DEPOSIT FEDERAL TAXES

1. Don is paid $10,000 a month—$5,000 on the 15th, and $5,000 on the last day of the month. As of October 31, 2020, Don’s year-to-date FICA wages are $100,000. How much FICA must Don’s employer withhold from his pay dated December 11, 2020?
2. 2. As of Friday, July 17, 2020, Ray’s year-to-date wages, including bonuses, are $137,500. How much FICA must Ray’s employer withhold from his pay for the next pay day on Friday, July 24, 2020 assuming his salary is $2,000?
3. Use the 2020 Payroll Tax Withholding Tables from IRS Pub. 15-T, (see Mastering Payroll, Section 6), to compute FITW for the following:

1. On her 2020 Form W-4, Sandy claims married filing jointly with no other adjustments and is paid $645 a week.
2. On his 2019 Form W-4, Zhang claims married and 1 allowance and is paid $745 per week.
3. On her 2020 Form W-4, Sofia claims single or married filing separately with no other adjustments and she is paid $480 weekly.
4. On his 2018 Form W-4, Carlo claims married and 2 allowances and is paid $525 a week.
5. On his 2020 Form W-4, Gene claims single and additional withholding of $5 in Step 4 and is paid $659 every week.

4. Which of the following employees is subject to FITW? to FICA? Answer “yes” or “no” in the spaces provided.

		FITW	FICA
a.	Dennis, a senior in high school, is 17 years old and works part-time after school and on weekends for his father, a CPA whose practice is a sole proprietorship.	yes	no
b.	Evita, 15 years old, works part-time at her father’s bakery, which her father runs as a partnership with his cousin.	yes	yes
c.	Patty, age 19, a full-time college student, lives at home with her parents and her disabled 10-year-old brother. Patty’s parents pay her to take care of her brother.	yes	no
d.	Debbie and Dave work full-time and pay Dave’s mother, Tina, to come to their home and watch the grandchildren after school.	yes	no

5. When is an employer not required to deposit federal employment taxes electronically?

6. What is the Form 941 lookback period? To which employer tax liabilities does it apply? How is it used to determine an employer’s deposit frequency in 2020?

7. For each of the following scenarios, determine whether the employer is a monthly, semiweekly or annual depositor for 2019 and check the appropriate box.

		Monthly	Semi-weekly	With Form 941
a.	AAA begins operation on March 1, 2020, and anticipates a 2020 Form 941 tax liability of $5,000.	X
b.	BBB was started in 1992. For the lookback period ending June 30, 2019, BBB’s cumulative tax liabilities were $45,000.	X
c.	CCC started up in 2005. For the lookback period ending June 30, 2019, CCC’s cumulative tax liabilities were $75,000.		X
d.	DDD began doing business in 2006. For the lookback period ending June 30, 2019, DDD’s cumulative tax liabilities were $45,000. DDD’s 941 tax liability for one payroll period in March 2020 was $103,550.		X
e.	EEE began hiring in 2000. For the look-back period ending June 30, 2019, EEE’s cumulative tax liabilities were $29,000. EEE’s tax liability for one payroll period in January 2020 is $100,050.		X
f.	FFF starts up in October 2020 and expects a 941 tax liability of $2,000 through the end of 2020.			X

Answer rating: 100% (QA)

How Employers Withhold and Deposit Federal Taxes Don Dons employer must withhold FICA taxes from both his paychecks on December 11 2020 because his ye... View the full answer