Utah Contractor Practice Exam

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If an employer accrues 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 year starting January 1 and ending December 31
Quarterly, based on company fiscal year

The correct answer is: Monthly

For employers who accrue more than $500 in federal withholding and social security taxes, the requirement is to make tax deposits on a monthly basis. This means that if an employer reaches the threshold of accumulating over $500 in these taxes in a given month, they need to deposit that amount by the 15th day of the following month. This monthly deposit schedule is designed to facilitate the timely remittance of tax obligations and helps ensure compliance with federal tax regulations. Other options represent different frequencies for tax deposits that apply in various situations but do not pertain to an employer that accrues more than $500. For instance, quarterly deposits apply to those with lower tax liabilities or different classification groups, but since the scenario specifies an accrual of over $500, monthly deposits are mandated.