Business FinancesQuestion 283 of 1632
A contractor is hiring its first employee. Which federal identification number must the business obtain from the IRS to report payroll taxes?
a.A Social Security Number (SSN)
b.An Individual Taxpayer Identification Number (ITIN)
c.An Employer Identification Number (EIN)
d.A CSLB license number
Explanation
An Employer Identification Number (EIN) is the federal tax ID a business uses to report and deposit payroll taxes. A CSLB license number identifies the contractor for licensing, not for federal tax reporting.
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Related questions on this topic
- Which of the following best describes "overhead" in construction estimating?
- A contractor pays an independent subcontractor $4,500 during the calendar year for installation work. Which tax form must the contractor issue to that subcontractor?
- What tax form does an employer issue to each EMPLOYEE at the end of the year to report wages and withholding?
- An employee's gross wages for a pay period are $2,000. Using the combined employee FICA rate of 7.65% (Social Security 6.2% plus Medicare 1.45%), how much is withheld from the paycheck for FICA?
- Which payroll tax is paid entirely by the EMPLOYER and never withheld from an employee's wages?
- A contractor classifies an independent subcontractor as an employee by mistake (or the reverse). The MOST significant financial risk of misclassifying a worker is:
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PrepPass team · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)