Identify the following statement that is false. a.If an employer is not required to withhold income taxes from an employee’s wages, the wages are not taxable to the employee. b.In certain situations, income tax withholding by an employer is voluntary. c.An employer must deposit with the government an amount of FICA tax that is twice the amount withheld from the employee’s salary (i.e., the employee’s and employer’s shares). d.If an excess amount of FICA is withheld for an employee because the employee has multiple jobs, the employee may claim a credit for the excess amount withheld on his or her income tax return.

Withholding - Withholding is the portion of an employee's wages that is not included in his or her paycheck but is instead remitted directly to the federal, state, or local tax authorities. Withholding Tax rate - A withholding tax is an amount that an employer withholds from employees’ wages and pays directly to the government. The amount withheld is a credit against the income taxes the employee must pay during the year. It also is a tax levied on income (interest, dividends) from securities which is owned by a non resident alien, as well as other income paid to nonresidents of a country. It is mandatory for all the residents of United States to pay this tax on their respective salary. A withholding tax takes a set amount of money out of an employee’s paycheck and pays it to the government. The money taken is a credit against the employee’s annual income tax. If too much money is withheld, an employee will receive a tax refund; if not enough is withheld, an employee will have an additional tax bill. In the United States of America, all income earners are obligated to pay income tax to the federal government and some state governments. The tax collected is used to improve the state of the country and the wellbeing of its residentsTherefore, all other options given are true to the fact except one which is - option a - If an employer is not required to withhold income taxes from an employee’s wages, the wages are not taxable to the employee. This is because withholding taxes are compulsorily deducted from employee's wages for all resident of the country and also for non resident of the country. Hence option a is false statement.

Answered: Identify the following statement that…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Identify the following statement that is false.

	a.	If an employer is not required to withhold income taxes from an employee’s wages, the wages are not taxable to the employee.
	b.	In certain situations, income tax withholding by an employer is voluntary.
	c.	An employer must deposit with the government an amount of FICA tax that is twice the amount withheld from the employee’s salary (i.e., the employee’s and employer’s shares).
	d.	If an excess amount of FICA is withheld for an employee because the employee has multiple jobs, the employee may claim a credit for the excess amount withheld on his or her income tax return.

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