Action or Procedure

Due Date

Done By

W/P Ref

Hours

Date

Entrance Interview

Obtain the Payroll Tax Kit – this is especially important for new clients.  Furnish the information and introduction as needed to the client.  Use of the organizer in the Entrance Interview will assist with be certain we have all that is necessary to perform the project.

Gather Documents

Prepare Records

Record keeping and write-up

Posting Payroll (creating payroll journals and earnings records “after-the-fact”)

Actual employee payroll checks with the FICA, Medicare, and                  other withholding.

Payments of services to individuals or companies.                   Heath care services are always included even if it is a                  corporation.

In the case of a sole proprietorship other things can be included regarding a vehicle used partially by the business and partially by the individual.  For the tax return the mileage may be used instead of actual expenses.

Therefore the expense may be coded to draw.  However                  services in relation to this vehicle may still need to be                  reported because a portion of the expense is going to be a                  business expense,

Be sure ending date is correct for period, enter PR4, Pay, or? For the data entry format.

KI all P/R checks and outside services checks (potential 1099 information) Then KI to CD1 the cash disbursements entry which should balance when done.

1.      When Keying from journals, at least key in monthly so the 941 & 940 liabilities will be correct

2.      Look at client check stubs to see if any are missing.

3.      Reconcile the check stubs to the bank statement

4.      Record or interface the totals from the payroll journal to the financial general ledger

Preparer Quality Checks

5.      Reconcile the financial general ledger checking account to the bank statement.

6.      Look for an employee getting paychecks for unusual amounts.  If the checks are always the same, these stand out a great                  deal.  If the paychecks change from period to period it is harder, however the check may look like the check for another employee or be way too small or too large.  If any of                  these things occur, look back at the check stub again and confirm it is OK.

7.      Look for employees pay periods.  Do they always get paid each week, or once a month?  Are there unusual pay periods in the earnings                  records?  This may indicate an error.  Confirm back to original data again.

8.      Check FICA & MEDICARE amounts to see if correct, first checking the YTD total.  If incorrect, you need to work your way back starting at              QTD and then month to date, then each check for an employee.  Normally it is not needed to              correct if off less than $.50.  Make any corrections by reversing the check and rekeying it in              correctly.  Print draft 940, 941, & TEC.               (either worksheet or form, laser printout if form)

9.      Match all amounts to the financial general ledger.

9.1.   Liability shown on the report and deposits subsequent to the balance sheet date

9.2.   Federal payroll tax expenses

9.3.   State payroll tax expenses

9.4.   Wages expenses

9.5.   1099 Amounts in the 1099 journals and earnings ledgers to the general ledger

9.6.   Do not print final quarterly reports until all figures are in               balance.

10.  Fill out reconciliation sheet that will be used at year-end.

11.  You need to know what payroll deposits have already been made              for the quarter working on, and what payments have already been made to TEC & FUTA.

11.1.                    Obtain the list of deposits form we have designed and furnished to the taxpayer.  See the prescribed form in the Excel spreadsheet.

12.  The state unemployment tax form printout will help you figure the amount due if any.  Take the taxable wages and multiply by the taxable rate for that client.  This amount will be what is due on the state unemployment tax form.  The state unemployment tax form needs to be typed on the state unemployment tax form.

13.  The 940 is ready to print once you know what has already been paid to FUTA & TEC. (Federal unemployment (& state) Reprint the 940 using laser printout & enter the amounts needed when asked for.

14.  The 941 can be reprinted when you know the payroll deposits that have been made.  Enter the total amount paid and print the laser generated form.  When you know all is correct then print the 941 on the printed form. Print using printer #5 for 941's.    You may need to adjust if the test copy is off.  The final printing of the 941 should include Schedule B ONLY if it is required to be filed with the return.  The printing of the Sch B will check the box on the 941 for semi-weekly depositors without consideration of whether the t/p is truly a semi-weekly depositor.

15.  Type cover letter to go to client with what is owed or not owed for the 941, 940, and TEC.  Attach each set of copies together and send to math check.  Checklists should be checked off and included with reports so that Bob can see it when doing overview. (and any amount needing to be deposited)

16.   

Prepare the following as needed or place a note in the cover letter to the client the following are required (if you discovered they were needed)

1.  W4 - Emp W-H Certificate

2. W9 - W-9

3. I9 - I-9

4. Minutes regarding officer salaries - Resolution Fixing Salary of Officer

5. Employment agreements – minutes of officer’s approval, or modification of the agreement - 

6. Employee Expense Reimbursements - The Accountable Plan

Math Check

Technical overview

Annual Reports - W-2's.

Preparation Actions and Procedures

1.       Go through reconciliation sheet with all figures from the W-2's, W-3's, G/L, etc.                  

2.       Do not print final 4th quarter p/r or annual p/r reports until all figures are in balance.      

3.       When the quarterly reports are complete it's time to do the W-2's.  First print a laser copy of W-2's (employer D copy) to check for any missing ID#'s.  Be sure to print W-2's w/ missing ID numbers.  If any are missing the client will need to be contacted.                        

4.       Check the profile maintenance on the W-3

5.       Check the FICA & Medicare to be sure they are correct.

6.       Make sure all boxes are filled in on the W-2's and W-3.  Set up could be wrong.                   

7.       On preliminary math check the W-2's to the W-3 in each box.

8.       When you know the figures are correct and you have all ID#'s, then you are ready to print.      

9.       First print the IRS copy (A) by using printer #3 for W-2's.  The settings should be 60/0/0.  You may need to adjust. You will need to choose the A copy and no on the others. Put in the printed forms and print.  It will ask if you want to print another client.  It may ask if you want to print error list. No.  It will ask if you want to print the W-3. You can say yes or you can print later.  BE sure and change the forms to W-3.

10.   Check totals on W-2 to see if they match the W-3 total.

11.   You will also need to print Copy D & Copy B & C (together).  Be sure and select No on copy A. Select laser print.

12.  Attach each set of copies together and send to math check.  Check lists should be checked off and included with reports so that Bob can see it when doing overview.

Math Check

Technical overview

Annual Reports - 1099's

Prepare all forms 1099

There are several kinds of 1099's.

There are also several boxes on the 1099 that data may need to print in.  An example is health care payments.  Make sure that each "employee" / (vendor) is set up properly to print in the proper box.  Below mark the number of 1099 Misc items that will fall in each category.  To do this, go through.

1.       1099 Misc - Box 1  - Rents

2.       1099 Misc - Box 2 – Royalties

3.       1099 Misc - box 3 - Other income

4.       1099 Misc - Box 5 - Fishing boat proceeds

5.       1099 Misc - Box 6 - Medical and health care payments

6.       1099 Misc - Box 7 – Nonemployee compensation

7.       1099 Misc - box 8 – Substitute payments in lieu of dividends or interest

8.       1099 Misc - box 10 – Crop insurance proceeds.

Technical overview or approval does not approve typed forms.  Errors seem to be inherent.  If for some reason forms must be typed, extreme caution must be used.  In addition typed forms do not have the quality of printed forms and do not project a good image of the firm.                

Preparation Actions and Procedures

Preparer Quality Checks

1.       Check for spelling and typographical errors.

2.       Check that the identification numbers are present and are all correct.

3.       Verify each to source document.

4.       Make sure the Void and Corrected boxes are used correctly.

5.       Make sure that the income presented is in the correct box.

6.       Make sure all data is within the box outline

7.       Verify that the proper identification numbers are in the proper box (Payer vs. Recipient, etc)

8.       Verify that copies are dark enough if typed.

9.       Verify address is present and correct according to our source documents.

10.   Be sure you have a payroll register printout for 9M format.

11.   Print a dry run of 1099's on blank paper to check for any missing ID #'s or addresses that may be needed.                           

12.   The program is set to only print 1099-misc over $600.  Some may need to be printed anyway. The 1099-DIV & 1099-Int will print over $10.

13.   For clients who have a 1099 to the adviser - print a general ledger statement and confirm the payments.

Math Check

1.       Check for spelling and typographical errors.

2.       Check that the identification numbers are present and are correct.  Verify each to source document.

3.       Make sure the Void and Corrected boxes are used correctly.

4.       Make sure that the income presented is in the correct box.

5.       Make sure all data is within the box outline

6.       Verify that the proper identification numbers are in the proper box (Payer vs. Recipient, etc)

7.       Verify that copies are dark enough if typed.

8.       Verify address is present and correct according to our source documents.

Technical Overview

Printing

1.       When you have all the ID#'s and addresses needed, then you can print Copy A using the              pre-printed forms.  You may need to adjust printer settings.  Be sure and select which 1099 you need to print (Misc, Int or Div) and put in the correct forms.  Also print 1096 after changing the forms.

2.       Check the profile maintenance for the 1096.

3.       Now print the Recipient copy B and Payer copy C using laser generated printout.

4.       Attach each set of copies together and sent to math check.

Prepare Presentation to the Client

Exit Interview