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CPP certification Q& As 2024
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CPP certification Q& As 2024
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CPP certification Q& As 2024§125 discrimination tests: - ANS-THE §125 PLAN MUST MEET THE ELIGIBILITY,
CONTRIBUTION AND BENEFITS, AND CONCENTRATION TESTS TO
DEMONSTRATE IT DOES NOT DISCRIMINATE IN FAVOR OF HIGHLY
COMPENSATED OR KEY EMPLOYEES.
2 types of qualified retirement plans: - ANS-DEFINED BENEFIT PLANS (BENEFITS
BASED ON A FORMULA) OR DEFINED CONTRIBUTION PLANS (BENEFITS BASED
ON EMPLOYER AND/OR EMPLOYEE CONTRIBUTIONS).
401(k) annual compensation limit: - ANS-THE AMOUNT OF COMPENSATION THAT
CAN BE TAKEN INTO ACCOUNT WHEN DETERMINING THE MAXIMUM
CONTRIBUTIONS TO AN EMPLOYEE'S DEFINED CONTRIBUTION PLAN ACCOUNT
IS $330,000.
401(k) annual contribution limit: - ANS-THE ANNUAL CONTRIBUTION LIMIT IS OF
THE LESSER OF $66,000 OR 100% OF THE EMPLOYEE'S COMPENSATION FOR
THE YEAR. IT IS THE MAXIMUM AMOUNT THAT THE EMPLOYER AND EMPLOYEE
MAY MAKE TO A 401(K) PLAN.
401(k) contributions can be held: - ANS-ASAP, No later than 15th business day of the
following month
403(b) catch-up contributions: - ANS-403(B) CATCH-UP CONTRIBUTIONS OF $6,500
CAN BE MADE BY EMPLOYEES AT LEAST 50 YEARS OLD BY DECEMBER 31ST
OF THE CALENDAR YEAR. IN ADDITION, EMPLOYEES WITH 15 YEARS OF
SERVICE CAN MAKE ADDITIONAL CATCH-UP CONTRIBUTIONS.
403(b) plans are for: - ANS-PUBLIC SCHOOLS AND TAX EXEMPT CHARITABLE,
RELIGIOUS, AND EDUCATIONAL ORGANIZATIONS.
457(b) plans are for: - ANS-457(B) PLANS ARE FOR PUBLIC SECTOR EMPLOYERS
(STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS OTHER
THAN CHURCHES).
A company understated its payroll tax liability by $15,000.00. The IRS determined this
understatement was due to negligence, not fraud. The maximum penalty would be what
percent of the underpayment? - ANS-20%.
,A penalty of 75% of the underpayment may be assessed when fraud is involved. The
Trust Fund Recovery Penalty (100%) can be assessed against certain officers of the
organization when taxes are not withheld or are not paid to the IRS.
A de minimus fringe benefit is: - ANS-A de minimus fringe benefit is an item provided to
an employee that is small in value, difficult to track, occasionally provided and not cash
or a cash equivalent.
A foreign citizen working in the US who has met the lawful permanent resident test
qualifies as a: - ANS-Resident alien
A highly compensated employee per the IRS is: - ANS-ONE WHO RECEIVED
COMPENSATION OF AT LEAST $150,000 IN THE PREVIOUS YEAR OR WAS AN
OWNER OF 5% OF THE COMPANY'S STOCK DURING THE PRECEDING YEAR.
A no-additional cost benefit is: - ANS-A NONTAXABLE BENEFIT PROVIDED BY AN
EMPLOYER. THE BENEFIT MUST BE A SERVICE SOLD TO CUSTOMERS AND
PROVIDED TO EMPLOYEES WITH NO SUBSTANTIAL COST TO THE EMPLOYER.
A nonexempt EE is provided room & board. Under FLSA, the EE's RROP calculation
includes: - ANS-100% of the fair market value of the room & board
A nonresident alien employee from France who is married with three dependents
completes a 2023 Form W-4. The employee must write NRA in the space below 4(c)
and indicate in Step 1(c): - ANS-single or married filing separately
A nonresident alien employee who wants to claim a treaty-based exemption from U.S.
income tax and withholding must provide the employer with a Form: - ANS-Form 8233.
Exemption From Withholding on Compensation for Independent (and Certain
Dependent) Personal Services of a Nonresident Alien Individual.
A nonresident alien from Germany has been working for a company in Texas. The
Texas employer had an opening in its Berlin office and sends the employee to Germany
to fill the position. What is the income tax situation with the employee who is now back
in Germany? - ANS-The employer should not withhold U.S. income, social security, and
Medicare taxes from the employee's wages if the employer is required to withhold
German taxes.
,A qualified employee discount is: - ANS-A QUALIFIED EMPLOYEE DISCOUNT IS A
NONTAXABLE BENEFIT WHEN THE EMPLOYER SELLS A PRODUCT OR SERVICE
TO AN EMPLOYEE AT A DISCOUNT. THE DISCOUNT IS LIMITED BASED ON THE
TYPE OF PRODUCT OR SERVICE SOLD.
A working condition fringe benefit is: - ANS-A non taxable benefit which relates to the
employee's trade or business provided to the employee.
According to Kotter, leadership is characterized as: - ANS-Direction, alignment,
motivation, change.
According to Kotter, management is characterized as: - ANS-planning and budgeting,
organizing and staffing, controlling and problem solving, and producing predictability
and order.
Accountable plan business expenses: - ANS-Accountable plan business expenses must
be expenses with a business connection, expenses substantiated within a reasonable
period, and excess advances returned within a reasonable period.
Agreements between the U.S. and foreign countries designed to avoid double taxation
of income are called: - ANS-Tax treaties
Am employee's accrued vacation is paid in the same year as the employee's death.
Payroll should: - ANS--Issue the check and withhold SS and MC
-Report taxable wages in boxes 3 & 5 on W2
-Report entire gross amount as income on Form 1099-MISC
An EE earns $1000 in commission during 4th quarter, will be paid in following quarter.
How will item appear in journal? - ANS--Debit accrued salary expense
-Credit accrued salary payable
An employee dies in December. A bonus is paid to the employee's beneficiary in
January. Payroll should: - ANS-Report payment on Form 1099-MISC in box 3. The year
after an employee's death, payments are not subject to FIT, SS or MC.
An employee's W-4 is invalid when: - ANS-Alterations, additions or deletions to the
form. Requests a flat dollar or percentage amount to be withheld. Employee indicates
the form is false to you in any way.
, An employer receives an ACA Marketplace notice stating one of its employees enrolled
in Health Insurance Marketplace coverage and is eligible for a premium tax credit. How
many days from the date of the letter does the employer have to request an appeal? -
ANS-90 days
An excess parachute payment is: - ANS-An excess parachute payment is made due to
a change in ownership. The excess parachute payment is the amount that exceeds the
employee's five-year average compensation.
An individual with an assertive communication style is described as one who: -
ANS-Prefers facts over speculation and prefers detailed advanced planning.
Backup withholding is deposited: - ANS-Either monthly or semi weekly depending on
lookback period for nonpayroll tax liability
Barriers to listening include: - ANS-1) Distractions
2) Tuning the person out
3) Reacting emotionally
4) Not reading body language
5) Sending false messages
6) Anticipating your response
Business continuity plan first step: - ANS-To obtain top management commitment to
developing and implementing the plan when needed.
Business travel expenses: - ANS-NONTAXABLE BUSINESS
TRAVEL EXPENSES MUST BE
PAID IN AN ACCOUNTABLE
PLAN FOR EXPENSES
INCURRED WHILE TRAVELING
AWAY FROM HOME
OVERNIGHT.
By claiming the tip credit under the FLSA, what is the minimum hourly cash wage
employers can pay employees who report at least $30.00 per month in tips? -
ANS-$2.13
Calculate employer's tax liability: - ANS-THE EMPLOYEE'S WITHHELD TAXES
(INCOME, SOCIAL SECURITY, AND MEDICARE TAXES) AND THE EMPLOYER'S
TAXES (SOCIAL SECURITY, AND MEDICARE TAXES)
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