Utah Contractor Practice Exam

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Prepare for the Utah Contractor Exam with comprehensive quizzes and study resources. Gain confidence by accessing multiple-choice questions designed to enhance your knowledge and skills for the licensing exam.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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If an employer accumulates more than $500 in federal withholding and social security taxes, when must tax deposits be made?

Monthly
Quarterly, based on the calendar year
Quarterly, based on a fiscal year
There are no specific requirements

The correct answer is: Monthly

Tax deposits for federal withholding and social security taxes must be made on a monthly basis if the accumulated amount exceeds $500. This requirement is set forth by the Internal Revenue Service (IRS), which categorizes employers based on their tax liability to determine how frequently they need to deposit taxes. Employers who accumulate more than $500 in withholding and social security taxes during a month are classified as monthly depositors. Consequently, they are obligated to deposit these taxes by the 15th day of the following month. Understanding this requirement is critical for compliance with federal tax regulations. Employers must keep track of their tax liabilities to ensure timely payments, avoid penalties, and maintain good standing with the IRS. Recognizing that different thresholds and categories exist for tax deposit requirements can help employers manage their tax obligations effectively.