Certified Payroll Professional Practice Exam

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When should small businesses pay their federal tax liability by check according to the Federal Employment Tax Requirements?

  1. Quarterly

  2. Yearly

  3. Monthly

  4. Bi-weekly

The correct answer is: Quarterly

Small businesses should pay their federal tax liability by check quarterly according to the Federal Employment Tax Requirements. This is because businesses are required to submit Form 941 quarterly to report income taxes, Social Security tax, and Medicare tax withheld from employees' paychecks. By paying taxes quarterly, small businesses can stay compliant with federal tax regulations and ensure that they are meeting their tax obligations in a timely manner. The other options, such as paying yearly, monthly, or bi-weekly, do not align with the standard quarterly tax reporting schedule for small businesses.

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