Non cash fringe benefits


Q1. All of the following are properly definedas wages subject to the withholding of federal incometaxes except _______.

  • year-endbonus
  • kitchen appliances givenby manufacturer in lieu of cash wages
  • dismissalpayment
  • vacation pay
  • payments made underworker's compensation law

Q2. Which of the following non cash fringe benefits does not represent taxable income subject to federalincome tax withholding?

  • flight onemployer-provided airline
  • personal use of companycar
  • sick pay
  • employer-paid membershipto a country club
  • All of the above are taxable.

Q3. A personal allowance ________.

  • amounted to $2,000in 2008
  • may be claimed to exempta portion of their earnings from withholding
  • is indexed for inflationevery calendar quarter
  • may be claimed at thesame time with each employer for whom an employee isworking during the year
  • may not be claimed bynonresident aliens from Argentina

Q4. To curb the practice of employees filingfalse Forms W-4, the IRS requires that an employer submit to theagency a copy of each Form W-4 ________.

  • the IRS has requested inwriting
  • on which an employee,usually earning $180 each week at the time Form W-4 was filed, nowclaims to be exempt from withholding
  • on which an employeeclaims to be single but has 9 withholding allowances
  • on which a marriedemployee claims no withholding allowances
  • on which a recentlydivorced employee claims 5 withholding allowances and authorizes anadditional $10 to be withheld each week

Q5. A company must withhold federal incometaxes from payments made to independent contractors in which of the following cases?
when there is a signedcontract between the parties

  • when the contractor ispaid more than $10,000
  • when the contractor is acorporation
  • when the contractor hasnot provided a taxpayer identification number and the contract is$600 or more
  • all of the above

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Accounting Basics: Non cash fringe benefits
Reference No:- TGS0555480

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