Employers' Income Tax Expense

A

Federal income tax is withheld from employee paychecks; it is not an expense to the company.

Employers' income tax expense consists of various obligations related to taxes they are responsible for paying. These taxes are typically withheld from employees' wages and are remitted to the appropriate government authorities by the employer. However, it's important to note that I cannot provide information specific to an exam from a particular provider. Nonetheless, I can offer a general explanation to help you understand the concept.

In the given options, we need to identify the obligation that is not included in employers' income tax expense. Let's review each option:

A. Federal Income Tax: Employers are responsible for withholding federal income tax from employees' wages and remitting it to the Internal Revenue Service (IRS). This tax is based on the income earned by employees and is a significant component of employers' income tax expense. Therefore, federal income tax is typically included in employers' income tax obligations.

B. Social Security Tax: Social Security tax, also known as the Federal Insurance Contributions Act (FICA) tax, is imposed on both employees and employers. Employers are responsible for withholding the employees' share of Social Security tax from their wages and also contribute their own portion. The collected taxes are remitted to the Social Security Administration. As employers are responsible for paying their portion of Social Security tax, it is a part of their income tax expense.

C. State Unemployment Tax: State unemployment tax is levied on employers to fund unemployment benefits for eligible individuals who are unemployed. Employers are required to make contributions to the state unemployment fund based on their employees' wages. This tax is used to provide temporary financial assistance to individuals who have lost their jobs. Therefore, state unemployment tax is another component of employers' income tax expense.

D. Medicare Tax: Medicare tax is another component of the FICA tax and is imposed on both employees and employers. Employers are responsible for withholding the employees' share of Medicare tax from their wages and contributing their own portion. The collected taxes are remitted to the IRS to fund Medicare programs. Therefore, Medicare tax is included in employers' income tax obligations.

Based on the explanation provided, all of the options listed (A, B, C, and D) represent obligations that are typically part of employers' income tax expense. Without additional information or context specific to the exam you mentioned, it is difficult to determine which option is the correct answer. It is essential to consult the exam materials or follow the guidelines provided by your exam preparation provider for the accurate answer.