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Correction to March Quiz on Law Firm Structures

By ALM Staff | Law Journal Newsletters |

In the March quiz on 'Firm Structure Gotchas,' questions 7 and 8 did not admit of a crisp yes/no answer with respect to the S-Corporate structure.

  • With regard to question 7, a reader in Sioux City, IA, pointed out that FICA must be withheld from owner paychecks in an S-Corporation, whose owners therefore do not pay self-employment tax and may not need to make quarterly estimated tax payments, depending on their personal tax situations.
  • The same reader observed that question 8 was also faulty for an S-Corporation, since an S-Corporation employee with more than a 2% ownership interest would indeed be excluded from participation in cafeteria benefit plans.

Please note that both errors were in quiz construction ' not in the referenced textbook, which is consistent with the corrections offered by our astute reader.

In the March quiz on 'Firm Structure Gotchas,' questions 7 and 8 did not admit of a crisp yes/no answer with respect to the S-Corporate structure.

  • With regard to question 7, a reader in Sioux City, IA, pointed out that FICA must be withheld from owner paychecks in an S-Corporation, whose owners therefore do not pay self-employment tax and may not need to make quarterly estimated tax payments, depending on their personal tax situations.
  • The same reader observed that question 8 was also faulty for an S-Corporation, since an S-Corporation employee with more than a 2% ownership interest would indeed be excluded from participation in cafeteria benefit plans.

Please note that both errors were in quiz construction ' not in the referenced textbook, which is consistent with the corrections offered by our astute reader.

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