EXERCISE 6.1: WEB QUEST

The IRS prepares a publication, the Employer's Tax Guide that summarizes information about payroll taxes.

To obtain a copy of the Employer's Tax Guide:

Step 1:Go to the www.irs.gov web site, Forms & Pubs.

Step 2:Select and print two of the following sections of the Employer's Tax Guide, IRS Publication 15, Circular E:

• Employee's Social Security Number (SSN)
• Employer Identification Number (EIN)
• Wages and Other Compensation
• Depositing Taxes
• Percentage Method 1
• Wage Bracket 3

EXERCISE 6.2: WEB QUEST

When hiring individuals to perform work for a business, it is important to identify the status of the individual as either an employee or independent contractor. For an employee, your business must withhold taxes and provide a W-2. For an independent contractor, your business does not have to withhold taxes. Instead of a W-2, you provide a contractor with a Form 1099-MISC. To learn more about whether a worker is classified for tax purposes as an employee or independent contractor, visit the IRS web site.

Step 1:Go to the www.irs.gov web site. Search for requirements that determine employee status and contractor status and print your search results.

Step 2: To learn more about employee versus contractor status, in QuickBooks click Company (menu bar), Company Center, More Decision Tools, Hiring and Employees, then Employee, Contractor, or Temp?.