An employer that deposits payroll taxes semiweekly incurs a tax liability of $55,000 on Tuesday and a tax liability of $110,000 on Wednesday. When must the taxes be deposited?

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Multiple Choice

An employer that deposits payroll taxes semiweekly incurs a tax liability of $55,000 on Tuesday and a tax liability of $110,000 on Wednesday. When must the taxes be deposited?

Explanation:
Under a semiweekly deposit schedule, payroll tax liabilities must be deposited within two business days after the day the liability is incurred. Here, one liability of 55,000 is incurred on Tuesday, so it must be deposited by Thursday. The other liability of 110,000 is incurred on Wednesday, so it must be deposited by Friday. Therefore, the correct timing is to deposit 110,000 on Thursday and 55,000 on Friday. Depositing the combined total on a single day or assigning different dates would violate the two-business-day rule for each liability.

Under a semiweekly deposit schedule, payroll tax liabilities must be deposited within two business days after the day the liability is incurred. Here, one liability of 55,000 is incurred on Tuesday, so it must be deposited by Thursday. The other liability of 110,000 is incurred on Wednesday, so it must be deposited by Friday. Therefore, the correct timing is to deposit 110,000 on Thursday and 55,000 on Friday. Depositing the combined total on a single day or assigning different dates would violate the two-business-day rule for each liability.

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