Payroll Accounting 2007, Chapter 3 Net Activities 3-3

Payroll Accounting, 2008 Edition Net Activities CHAPTER 3

1. Go to http://www.irs.gov/businesses/small/article/0,,id=163720,00.html and http://www.irs.gov/publications/p531/ix01.html Il Ristorante Della Patata, a popular local eatery, has recently hired you to do its payroll. Unfortunately, your predecessor left you with no formal method of maintain- ing employee tip records. You are to meet with your staff this Friday and provide them with information and a recommendation for tip reporting procedures. Prepare a short presentation on the methods that can be used and your recommendation as to which method should be used.

2. Go to a search engine such as http://www.google.com/ or http://www.ask.com/. Type “why safeguard social security number.” Discuss the following questions: a. Why is it important to safeguard your social security number?

b. What can you do to safeguard your social security number?

c. Discuss what you would do if your identity were stolen.

3. Go to http://www.eftps.gov. a. How long does it take a taxpayer to enroll in the Electronic Federal Tax Pay- ment System (EFTPS)?

b. What are the advantages of the EFTPS?

4. You are a 20-year-old accounting student. Your father operates the family farm rais- ing lettuce and melons. He pays workers on a piece basis and hires them for six weeks per year. In addition to hiring seasonal workers for harvest, he pays you a salary for keeping the farm’s books. Using a search engine such as http://www.google.com/, find the answers to the following questions: a. What form does your father need to use to report FICA taxes for his harvest workers?

b. How often must your father file for his seasonal harvest workers?

c. What are your father’s FICA tax liability and filing requirements for you?

3-1 3-2 Payroll Accounting 2007, Chapter 3 Net Activities

5. Go to http://www.ssa.gov/pubs/10022.html . Discuss the following questions: a. How is self-employment income treated differently than income earned when you work for an employer?

b. How do you report self-employment income?