APA FPC-Remote Questions Answers

Comprehensive and Detailed Explanation:Ashadow payrollis amechanism used for employees on international assignmentswho remain on thehome country’s payrollbut mustcomply with host country tax withholding.

Thehome country employer processes payroll normally, while thehost country imposes local tax liabilities.

Theshadow payrollensures compliance withboth home and host country tax regulations.

Option A (Certified Payroll)applies togovernment contracts.

Option C (Off-Cycle Payroll)refers toout-of-schedule payments.

Option D (Supplemental Payroll)refers tobonus or commission payrolls.

Comprehensive and Detailed Explanation:Using theIRS Supplemental Wage Method, theflat tax rateof22%applies tobonuses:

Federal Income Tax:

$5,000 × 22% = $1,100.00

Social Security Tax:

$5,000 × 6.2% = $310.00

Medicare Tax:

$5,000 × 1.45% = $72.50

State Income Tax:

$5,000 × 5.0% = $250.00

Total Taxes Withheld:

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Comprehensive and Detailed Explanation:TheReasonable Basis Testallows an employer to classify a worker as anindependent contractorif:

A previous IRS audit approved similar treatment

A court ruling or IRS ruling supports classification

Industry practices support independent contractor status

Option A (Common Law Test)determines if a worker should be anemployee or independent contractor, butdoes not override misclassification.

Option C (Physical Presence Test)applies toforeign earned income exclusions.

Option D (Permanent Resident Test)applies toimmigration status, not worker classification.

Comprehensive and Detailed Explanation:Payroll confidentiality ensuresemployee information is only disclosed with proper authorization.

Option A (Payment history with written authorization) is NOT a breachbecause the employee provided consent.

Option C (General ledger costing shared with accounting) is NOT a breachsince accounting requires financial data for compliance.

Option D (Payroll records to legal department) is NOT a breachas legal teams need data for investigations.

Option B (Providing benefit election information to a spouse) is a breachunless the employeehas explicitly authorizedtheir spouse to receive this information.