CPP Bootcamp 2025 > Module 6 > Flashcards

Module 6 Flashcards

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1
Q

Form W-2 Box1:

A

Form W-2 Box 1, Wages, tips, other compensation, is
used to report all taxable wages, tips, and other
compensation provided to an employee during the
calendar year.

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2
Q

Form W-2 Box 3:

A

Form W-2 Box 3, Social security wages, is used to
report an employee’s wages subject to the social
security tax. The maximum amount reported in Box 3
is $176,100. Do NOT include tips.

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3
Q

Form W-2 Box 5:

A

Form W-2 Box 5, Medicare wages and tips, is used to
report an employee’s wages subject to the Medicare
tax. There is no maximum amount reported in Box 5.

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4
Q

Form W-2 Box 10:

A

Form W-2 Box 10, Dependent care benefits, is used to
report taxable and nontaxable dependent care
assistance.

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5
Q

The effective FUTA tax rate:

A

The effective FUTA tax rate is 0.6% for employers who
have paid all SUTA taxes timely and are not in a state
with credit reduction.

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6
Q

The lookback period is:

A

The Form 941 lookback period is the 12-month period
ending the previous June 30. The lookback period
determines if an employer is a monthly or semiweekly
federal tax depositor. The lookback period for Forms
943 and 945 is the second prior year.

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7
Q

What is a depositor status?

A

An employer is either a monthly or semiweekly
depositor of employment taxes. In the lookback period,
a monthly depositor’s liability is $50,000 or less; a
semiweekly depositor’s liability is more than $50,000.

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8
Q

What is EFTPS?

A

EFTPS is IRS Electronic Federal Tax Payment System
for making tax deposits. Employers, except those with
a tax liability of $2,500 or less in the current or prior
quarter, are required to use EFTPS.

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9
Q

What is Form 1099-NEC?

A

Form 1099-NEC, Nonemployee Compensation,
reports employer payments (including backup
withholding) to nonemployees and the IRS. The form
must be sent to the nonemployee and filed with the
IRS by 1/31.

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10
Q

What is Form 940?

A

Form 940, Employer’s Annual Federal Unemployment
(FUTA) Tax Return, reports taxable wages, calculates
FUTA tax, and reports quarterly FUTA tax liability.

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11
Q

What is Form 941?

A

Form 941, Employer’s Quarterly Federal Tax Return,
filed with the IRS is used to report taxable wages,
federal income tax withheld, social security and
Medicare wages and taxes, and tax deposits.

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12
Q

What is Form 944?

A

Form 944, Employer’s Annual Federal Tax Return,
can be used by employers with an annual tax liability of
$1,000 or less to report wages, FITW, social security
and Medicare wages and taxes, and deposits.

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13
Q

What is Form 945?

A

Form 945, Annual Return of Withheld Federal Income
Tax, is used to report federal income tax withheld from
nonpayroll payments and nonpayroll tax deposits.

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14
Q

What is Form W-2?

A

Form W-2, Wage and Tax Statement, is filed with the
SSA reporting wages, FITW, social security and
Medicare wages and taxes, and other information.
Form W-2 is furnished to employees and SSA by 1/31.

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15
Q

What is Form W-2c?

A

Form W-2c, Corrected Wage and Tax Statement, is
filed with SSA to correct a previously filed Forms W-2
wages, taxes, and other information.

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16
Q

What is FUTA?

A

FUTA is the Federal Unemployment Tax Act. The
FUTA tax rate, paid by employers, is 6.0% of an
employee’s wages up to $7,000. Most employers can
qualify for a 5.4% credit and only pay an effective rate
of 0.6%.

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17
Q

What is the FIRE system?

A

The FIRE system is an acronym for Filing Information
Returns Electronically. Employers use the IRS system
to electronically file forms of the 1099 series.

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18
Q

What is the FUTA tax credit?

A

Employers paying state unemployment taxes timely
can get a FUTA tax credit maximum of 5.4%. The
credit may be reduced due to states in credit reduction
status.

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19
Q

What is the FUTA wage base?

A

$7,000

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20
Q

What is form 941-X?

A

Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund

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21
Q

What kind of depositor is a new employer?

A

monthly depositors because they have no tax liability experience during the lookback period

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22
Q

Types of nonpayroll withholdings:

A

In addition to withholding taxes from employees’ wages, employers must also withhold federal income tax from several types of nonpayroll payments they make, including:
-Reportable payments subject to backup withholding
-Gambling winnings
-Retirement pay for service in the Armed Forces
-Pensions, annuities, IRAs, and other deferred income

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23
Q

What is the look-back period for nonpayroll withholdings?

A

the second calendar year preceding the current calendar year (for 2025, the lookback period is 2023; for 2026, it is 2024).

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24
Q

What is a employer’s depositor status for nonpayroll withholdings?

A

Monthly depositors if the amount of nonpayroll withheld income tax liability accumulated in the lookback period is $50,000 or less; or
Semiweekly depositors if the amount of accumulated nonpayroll withheld taxes exceeds $50,000.

Once an employer’s nonpayroll withholding tax depositor status is determined, it must deposit the nonpayroll withheld taxes according to the same time frame and manner as deposits for payroll taxes.

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25
What is the look-back period for a new employer?
Their first lookback period will be measured from the date their operations began until the next June 30. EX, if a business began on 2.08.25, their lookback period is 2.08.25-6.30.25 and their depositor status would be determined in 2026
26
When are tax liabilities due by the employer?
Monthly depositors - the 15th of the month for the prior month Semiweekly depositors - wages paid on Wednesday, Thursday, and Friday are due by the following Wednesday. Wages paid on Saturday, Sunday, Monday, and Tuesday are due by the following Friday.
27
What is the one-day deposit rule?
If an employer’s accumulated employment tax liability reaches $100,000 on any day during a monthly or semiweekly deposit period, the taxes must be deposited by the close of the next business day. In determining whether the $100,000 threshold is met: -Monthly depositors consider only those taxes accumulated during the current calendar month, not any previous months; and -Semiweekly depositors take into account only those taxes accumulated during the current Wednesday–Friday or Saturday–Tuesday semiweekly period.
28
Impact of One-Day-Rule on Monthly Depositors:
ER becomes a semiweekly depositor for the remainder of the current calendar year and the entire next calendar year. Also applies to monthly depositors of nonpayroll withheld tax. The two types of withheld taxes are treated separately for purposes of determining an employer’s depositor status and for determining whether the one-day deposit rule is triggered.
29
Annual Deposit Rule
ERs whose filing history shows $1,000 or less in employment taxes each year as Form 944 filers. File annual Form 944, Employer’s Annual Federal Tax Return, instead of Form 941.
30
Saturday, Sunday, and Holiday Extension
If the due date of a deposit is Saturday, Sunday, or a federal holiday, the deposit is due on the next business day. If any of the three weekdays following the semiweekly period is not a business day, the employer has an additional day to make its deposit.
31
Shortfall (Accuracy of Deposits) Rule
Shortfall is less than the greater of $100 or 2% of the total deposit obligation. 2% is allowed for shortfall or minor errors. The shortfall must be deposited by a specific makeup date. For Semiweekly Depositors: By the earlier of (i) the first Wednesday or Friday (whichever is first) on or after the 15th of the following month, or (ii) the return due date. For Monthly Depositors: Must be deposited or remitted by the due date of the quarterly return for the quarter during which the employment tax liability was incurred.
32
Agricultural Employers/Railroad Retirement Taxes filing
File annual employment tax returns rather than quarterly returns. Lookback period is the second calendar year preceding the year for which the depositor status determination is being made (e.g., calendar year 2023 lookback period for determining depositor status for 2025). The $50,000 threshold separating monthly from semiweekly depositors is the same.
33
What are ER tax liabilities?
FIT W/held SS W/held Medicare W/held ER portion of SS ER portion of Medicare
34
EFTPS-Direct (ACH Debit) and EFTPS-Through a Financial Institution (ACH Credit)
EFTPS-Direct: An ACH debit entry. ER pays. EFTPS-Through a Financial Institution: An ACH credit entry. Bank originates payment through deposit through ACH
35
In a sale of business or acquisition, who files the 941?
Forms 941 must be filed by both the previous and current owners for the quarter during which the sale took place. Each employer must report only the wages it paid and taxes it withheld.
36
In a merger, who files the 941?
The firm that results must file Form 941 for the quarter during which the change took place, reporting the wages paid and taxes withheld by both companies.
37
Form 941 Line 1 Reporting Requirements
Number of employees
38
Form 941 Line 2 Reporting Requirements
Wages, tips, and other compensation
39
Form 941 Line 3 Reporting Requirements
Federal income tax withheld from wages, tips, and other compensation
40
Form 941 Line 4 Reporting Requirements
If no wages, tips and other compensation are subject to social security or Medicare tax
41
Form 941 Line 5a Column 1 Reporting Requirements
Taxable social security wages
42
Form 941 Line 5a Column 2 Reporting Requirements
Multiply the wages in Line 5a, Column 1 by 12.4% and place this amount in the box
43
Form 941 Line 5b Column 1 Reporting Requirements
Taxable social security tips
44
Form 941 Line 5b Column 2 Reporting Requirements
Multiply the tips in Line 5b, Column 1 by 12.4% and place this amount in the box
45
Form 941 Line 5c Column 1 Reporting Requirements
Taxable Medicare wages and tips
46
Form 941 Line 5c Column 2 Reporting Requirements
Multiply the wages and tips on Line 5c Column 1, by 2.9% and place this amount in the box
47
Form 941 Line 5d Column 1 Reporting Requirements
Taxable wages & tips subject to Additional Medicare Tax withholding
48
Form 941 Line 5d Column 2 Reporting Requirements
Multiply the wages and tips on Line 5d, Column 1, by 0.9% and place this amount in the box
49
Form 941 Line 5e Reporting Requirements
Total social security and Medicare taxes. Sums of Column 2
50
Form 941 Line 5f Reporting Requirements
Section 3121(q) Notice and Demand—Tax due on unreported tips
51
Form 941 Line 6 Reporting Requirements
Total taxes before adjustments
52
Form 941 Line 7 Reporting Requirements
Current quarter’s adjustment for fractions of cents
53
Form 941 Line 8 Reporting Requirements
Current quarter’s adjustment for sick pay
54
Form 941 Line 9 Reporting Requirements
Current quarter’s adjustments for tips and group-term life insurance
55
Form 941 Line 10 Reporting Requirements
Total taxes after adjustments
56
Form 941 Line 11 Reporting Requirements
Qualified small business payroll tax credit for increasing research activities
57
Form 941 Line 12 Reporting Requirements
Total taxes after adjustments and nonrefundable credits
58
Form 941 Line 13 Reporting Requirements
Total deposits for this quarter, including overpayment applied from a prior quarter and overpayments applied from Form 941-X, 941-X (PR), 944-X, or 944-X (SP) filed in the current quarter
59
Form 941 Line 14 Reporting Requirements
Balance due
60
Form 941 Line 15 Reporting Requirements
Overpayment
61
Form 941 Line 16 Reporting Requirements
Check box about depositor status and lookback taxes
62
Form 941 Line 17 Reporting Requirements
If your business has closed or you stopped paying wages
63
Form 941 Line 18 Reporting Requirements
If you are a seasonal employer and you do not have to file a return for every quarter of the year
64
Form 941 Part 4 Reporting Requirements
May we speak with your third-party designee?
65
Form 941 Part 5 Reporting Requirements
Sign here
66
Who must file a 941 Schedule B?
semiweekly depositors monthly depositors accumulating $100,000 or more in employment tax liability on any given day in the quarter or that became a semiweekly depositor in a quarter earlier in the current or prior year
67
What is reported on a 941 Schedule B?
Liabilities—not deposits
68
What is 941 Schedule R?
Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, is used to allocate the aggregate information reported on Form 941 to each client
69
Who must file 941 Schedule R?
each time an aggregate Form 941 is filed. Aggregate Forms 941 are filed by agents approved by the IRS
70
When must 941 Schedule R be filed?
When filing an aggregate Form 941, file Schedule R (Form 941) with the aggregate Form 941 every quarter when Form 941 is due.
71
For third-party designees, which of the following statements is TRUE? A. Written tax return information is available upon request B. Designees may receive refund checks C. Additional tax liability is possible D. Authorization automatically expires 90 days from the due date
A. Written tax return information is available upon request
72
When is an employer required to file information returns electronically?
Employers filing 10 or more information returns in a calendar year are required to file all their information returns, including Forms W‑2, electronically.
73
When can a terminated EE get their W-2?
January 31st OR Can request early after they have termed and ER must provide copy within 30 days
74
What happens if a W-2 is undeliverable?
ER should keep on file for at least 4 years. When a new address is known, mail a revised copy to the EE.
75
Foreign agricultural workers admitted into the U.S. on H-2A visas are exempt from federal income tax withholding AND U.S. social security and Medicare taxes (FICA) on wages paid to them for services performed in connection with their H-2A visa. True / False
True
76
H-2A agricultural workers are statutory employees. True / False
False
77
What are the backup withholdings for H-2A workers?
24% If they have not furnished a U.S. SSN or an IRS-issued Individual Taxpayer Identification Number (ITIN) to the employer, AND The total annual wages paid is at least $600.
78
What is the IRIS Portal?
The IRS Information Returns Intake System (IRIS) Taxpayer Portal is a system that provides an online method for users to electronically file Form 1099 series.
79
When does a state have to repay a loan to avoid a credit reduction for its employers?
By November 10 of the year the reduction is scheduled to take effect.
80
When are FUTA tax deposits due?
In each of the first three quarters, if the employer’s liability is more than $500, the entire liability must be deposited by the last day of the month following the end of the quarter. If less than $500, liability is carried over to next quarter. If fourth quarter, and less than $500, balance can be included with 940 by January 31.
81
FUTA Tax Deposit Due Dates
First quarter ends March 31 - Deposit due April 30 Second quarter ends June 30 - Deposit due July 31 Third quarter ends Sept. 30 - Deposit due Oct. 31
82
Who Must File Form 940?
If wages of $1,500 or more were paid to employees in any calendar quarter during 2024 or 2025? OR If one or more employees employed for at least some part of a day in any 20 or more different weeks in 2024 or 20 or more different weeks in 2025? Count all full-time, part-time, and temporary employees. However, a partnership does not count its partners.
83
When Must You File Form 940?
The due date for filing Form 940 for 2025 is January 31, 2026. However, if all FUTA taxes are deposited when due, Form 940 may be filed by February 12, 2026.
84
Where Must Form 940 Be Filed?
After Form 940 has been completed and signed, it should be mailed to the IRS as indicated on the form’s instructions.
85
What is Form 1099-MISC?
Used to report payments of \(\$600\) or more (or \(\ge \$10\) in royalties) made in the course of a business to individuals who are not employees. It covers income such as rent, prizes, awards, and legal payments, generally excluding freelance work (now reported on 1099-NEC).  Payments to health care providers Royalty payments Payments to attorneys Other payments Backup withholding Nonqualified deferred compensation for nonemployees
86
When is the 1099-Misc due?
Copies B and 2 - to the recipient by January 31. Copy A - Filed with the IRS by February 28 (March 2, 2026, because February 28 falls on a Saturday) if filed on paper and by March 31 if filed electronically. May request automatic extension using Form 8809. More than 10 forms must be filed electronically
87
What is Form 8809?
Application for Extension of Time To File Information Returns - used by businesses and payers to request a 30-day extension to file various information returns, such as Forms 1099, W-2, 1098, and 8027. It must be submitted on or before the original due date of the return. Applicable Forms: Covers Forms 1099, W-2, W-2G, 1042-S, 1094-C, 1095, 1097, 1098, 3921, 3922, 5498, and 8027.
88
When is the 1099-NEC due?
Copies B and 2 - to the recipient by January 31. Copy A - Filed with the IRS by January 31 (February 2, 2026, because Jan 31 falls on a Saturday) , paper and electronic. More than 10 forms must be filed electronically No automatic extension. IRS may grant in extraordinary circumstances or a catastrophe after submitting form 8809.
89
What is Form 1099-R?
Payers who make distributions of retirement income from qualified pension plans must report those payments and any amount withheld for federal income tax on Form 1099‑R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
90
When is the 1099-R due?
Copies B, C, and 2 - to the recipient by January 31. (No extensions will be granted.) Copy A - Filed with the IRS by February 28 (March 2, 2026, because February 28 falls on a Saturday) if filed on paper and by March 31 if filed electronically. May request automatic extension using Form 8809. More than 10 forms must be filed electronically.
91
When to File Form 945?
For 2025, file Form 945 by January 31, 2026. However, if you made deposits on time and in full payment of the taxes for the year, you may file the return by February 10, 2026.
92
When should you file a Schedule D (Form 941)?
Use Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations, if there are discrepancies between the totals reported on Forms W‑2 and 941 as a result of an acquisition, statutory merger, or consolidation.
93
What is a Form 943?
IRS Form 943 (Employer's Annual Federal Tax Return for Agricultural Employees) is an annual tax form used by farmers and agricultural employers to report federal income tax withheld and Social Security/Medicare taxes for farmworkers. It is mandatory if you paid cash wages of $2,500 or more or employed 10 or more workers in a year. The form is due by January 31st. 
94
What is Form 1042?
IRS Form 1042 (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons) is used by withholding agents to report and remit taxes withheld from payments made to foreign persons, such as non-resident aliens, foreign partnerships, or corporations. It summarizes total tax withheld, covering items like dividends, interest, and royalties.
95
What are the penalties for late filing and deposits of Form 1042?
5% of the tax which should have been shown on the return for each month or part of a month the return is late, up to 25% of the unpaid tax. The penalty for filing a late or incorrect Form 1042‑S depends on when a correct form is filed. The penalty for failure to furnish 2025 Forms 1042-S to payees in 2026 is as follows: $60 if the correct form is filed within 30 days, up to a maximum of $683,000 ($239,000 for a small business); $130 if the correct form is filed by August 1, up to a maximum of $2,049,000 ($683,000 for a small business); $340 if the correct form is filed after August 1 or no correct form is filed, up to a maximum of $4,098,500 ($1,366,000 for a small business) If the requirement is intentionally disregarded, the penalty becomes the greater of $680 per statement or 10% of the total amounts to be reported on all statements.
96
What is Form 843?
843, Claim for Refund and Request for Abatement, is used to file a claim a refund or request an abatement of certain taxes, interest, penalties, fees, and additions to tax.
97
Two methods available for e-filing Forms 940, 941, or 944 are: A. e-file through an authorized provider and Electronic Return Originator. B. through off the shelf software and in an encrypted email. C. in an encrypted email and e-file for reporting agent. D. e-file through an authorized provider and off the shelf software.
D. e-file through an authorized provider and off the shelf software.
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