Payroll Fundamentals Ch. 1 Study Set Exam Q&A

Payroll Fundamentals Ch. 1 Study Set Exam Q&A Worker Status - CORRECT ANSWER-Employee or Independent Contractor Employee - CORRECT ANSWER--Taxes withheld -Provide W-2 -Unemployment taxes paid -Subject to all federal and state laws Independent Contractor - CORRECT ANSWER--No taxes withheld -Provide 1099-MISC to report payments over $600 for the year -No unemployment taxes are paid Independent Contractor: Reasonable Basis Test - CORRECT ANSWER-An employer may treat a worker as an independent contractor if it has a "reasonable basis" to do so (as determined by section 530 of the Revenue Act of 1978) -Court decisions, published IRS rulings, private letter ruling, etc. -Past IRS audit -A longstanding, recognized practice Temporary help agency/service employees and Leased employees - CORRECT ANSWER-The company ("employer") contracts with a vendor (temporary agency or leasing company) to provide staff to do work. Consequences of mis-classifying workers? - CORRECT ANSWER-Government may lose revenue -federal, state, local tax revenue Many agencies "enforce" proper classification of workers such as? - CORRECT ANSWER--IRS -DOL -state unemployment agencies -state and local government agencies The Immigration Reform and Control Act of 1986 (IRCA) - CORRECT ANSWERemployers must comply by verifying the identity and right to work of its employees. Make sure both sections of Form I-9 are complete. Form SS-5 - CORRECT ANSWER-how to get a SSN