18 Questions
The Form W-2 is also known as a ______ statement.
withholding
Employee’s ______ records are used to prepare the W-2 forms.
earnings
The Form W-2 provides information on employee’s ______ and tax withholdings for the year.
earnings
The ______ form permits employer to list total deductions, and to reconcile the gross earnings, deductions, and the net pay.
substitution
If the firm issues 250 or more forms, the W-2 must be ______ electronically.
filed
The employer must send a copy of the W-2 form to the ______ administration.
social security
Employee’s earnings and tax ______ are reported on Form W-2.
withholdings
Employers submit Form W-3 to the ______ Administration along with copies of Form W-2.
Social Security
Payroll taxes can be deposited electronically through the ______ System.
Electronic Federal Tax Payment
Employers with annual federal tax deposits exceeding $ ______ must use the EFTPS.
200,000
A preprinted government form, Form 941, is used by employers to report ______ tax information.
payroll
The frequency of tax deposits depends on the ______ liability.
tax
The due date is extended to February 10 if all ______ deposits were made on time.
tax
Information needed to fill out this form comes from individual ______ records and state unemployment tax returns filed during the year.
earnings
The ______ company calculates the actual premium if the actual premium is more than has been paid.
insurance
At the end of the year the ______ company calculates the actual premium if the actual premium is more than has been paid.
insurance
Typically paid by employers with a few ______ at the end of the year the insurance company calculates the actual premium.
employees
From January through November they pay the actual ______ due based on an audit of the month’s wages.
premium
Study Notes
Payroll Tax and Reporting
- An employer is responsible for paying the difference in taxes if they did not deduct enough from an employee's earnings, which is debited to the payroll tax expense account.
- Form 941 is used to report payroll tax information to the Internal Revenue Service.
W-2 Forms
- A W-2 form, also known as a Withholding Statement, is provided to each employee by January 31 for the previous calendar year's earnings.
- The form provides information on employee earnings and tax withholdings for the year.
- Employers may use a standard or IRS-approved substitution form, which allows for listing total deductions and reconciling gross earnings, deductions, and net pay.
Distribution of W-2 Forms
- 4-6 copies of the W-2 form are prepared: one for the Social Security Administration, one for the employee to attach to their federal tax return, one for the employee's records, one for the employer's records, and additional copies if necessary.
Payroll Tax Deposits
- Payroll taxes can be deposited through a check at a Federal Reserve Bank or any other financial institution, but electronic deposits are the preferred method.
- The Electronic Federal Tax Payment System (EFTPS) is required for businesses with annual federal tax deposits exceeding $200,000.
- Employers who fail to use EFTPS when required are subject to a 10% penalty.
- The frequency of deposits depends on tax liability and the lookback period, which is a four-quarter period ending on June 30th of the preceding year.
Workers' Compensation Insurance
- Workers' Compensation Insurance provides benefits to employees injured on the job and is typically more expensive for employees with dangerous jobs.
- Insurance premiums can be paid in advance or through monthly/quarterly payments, with the actual premium calculated at the end of the year.
Test your knowledge of important payroll tax forms and statements, including Form 941, Form W-2, and Form W-3. Learn about the purpose and content of each form and how they are used to report tax information to the Internal Revenue Service. Brush up on your understanding of social security, medicare, and employee income tax withholding.
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