NUMBER CRUNCHIN' NEWS
May 2001

April Meeting Minutes

• Caron Garliepp opened the meeting at 11:55 a.m.
• A new member and a guest introduced themselves.
• Lisa Gonzales thanked everyone who had responded via the list server to her request for advice (she took the job!).
• Bonnie Pender won the free lunch for May.
• Roxanne Russell circulated a proof of the referral list, for review by those present.
• This was a social meeting, and after a delicious lunch, the "April surprise" was an ice cream buffet, which was much enjoyed.

  ---

You’ve just received notification from the Social Security Administration (SSA) that an employee’s Social Security number does not match SSA records. What do you do?

First, relax. The mismatch does not always indicate a falsified document—it could be because of a name change, change of marital status, or a host of other circumstances.

The second thing an employer should do is to determine an employee’s legal right to work in the U.S. Employees often use a Social Security card as one form of identification when completing Form I-9, which should be completed at the time of hiring. According to the California Chamber of Commerce, employers should review the employee’s completed I-9 form to determine whether the employee presented the Social Security card as a form of ID. If the employee used forms of identification other than a Social Security card, the I-9 form remains valid and does not need to be revised.

However, if the employee used a Social Security card as a form of ID in completing the I-9 form, you’ll need to determine if the card is "essential." The card is essential if: 1) no "List A" document was presented and 2) the Social Security card was one of the two forms of ID presented by the employee.

If the Social Security card is essential to the I-9 form, ask to see the employee’s Social Security card to double-check if the name was misspelled and reported correctly to the SSA. If the error was made in the report to the SSA—such as the wrong number or name reported—correct your records and send the number, name, and related data to Social Security in a subsequent report. If the wrong name or number was written on the I-9 form, date and sign it. Don’t discard the original form I-9 to prepare a new one. Don’t delete the original number or other information by erasing, marking over, or whiting out.

If the number shown on the card matches the SSA notice, ask the employee to check with a Social Security office to determine the problem and correct it. Also ask the employee for other forms of ID from the three lists of documents on the I-9 form. If the employee produces another form of ID that appears genuine, write the required information on the I-9 form. If the employee cannot produce a document from the I-9 lists within three business days, you may terminate the employee.

NOTE: Employees should report name changes to the SSA by completing Form SS-5 or calling (800) 772-1213

Source: CRA Bulletin No. 4 / April-May 2001

Use of closing dates can prevent most users from being able to change or delete transactions dated before the closing date. Permissions can be set to allow certain users, or only the Administrator, to change closed transactions. To set a closing date in QuickBooks 2001 or 2000 choose Set Up Users from the Company menu, and then click the Closing Date button. Enter a closing date, then click OK and Close. To set a closing date in QuickBooks 6.0 and 99, choose Set up Users, and then the Closing Date button. Enter a closing date, then click OK and Close.

An employer is required to send a copy of an employee's W-4 to the IRS if any of the following conditions are met:

• The employee claims in excess of ten withholding exemptions.
• The employee claims to be exempt from state or federal income tax withholding and the employee expects the wages subject to withholding to exceed $200 per week.
• The employee makes material alterations on the certificate, such as deleting language, defacing the form, or providing information other than that requested.
• The employee admits the certificate is false.

Note: If the employer has employees who make such assertions the employer is required to post Form DE-35 which explains the above information to employees. DE-35 is available in English and Spanish from the local EDD office or can be downloaded from http://158.96.231.223/edd/taxform.htm.

Source: CRA Bulletin No. 2 / February 2001

The state Employment Development Department has a new toll-free number to help its customers access payroll tax information and assistance 24 hours a day, seven days a week. Some of the payroll tax information and services available on the toll-free number at (888) 745-3886 include: registering as an employer; changing your account status; information on the current status of your account; ordering forms and publications; and assistance in completing forms.

EDD staff is available on regular workdays from 7:30 a.m. to 5:30 p.m. to answer additional questions.

Source: CRA Bulleting No. 4 / April-May 2001

Under current law, you can give every donee (the person receiving the gift) $10,000 per year (called the annual exclusion) without incurring any gift tax liability. If you’re married, the tax-free gift can be up to $20,000 per donee. If you want to use your $10,000 $20,000 annual exclusion without incurring any gift tax liability, you MUST complete the gift in that year. Make sure the donees cash the checks in the year they are given or, better yet, have the checks certified before delivering them to the donees. For gifts of stock of your closely held corporation, transfer the shares before year-end on the corporate records: actually issue the new stock certificates to your donees. (For the gift to hold water, you must get an independent appraisal. Hire your appraiser early in the year). What about real estate?…Record the transfer deed before year-end.

Source: Irv Blackman; Tax Secrets of The Wealthy

When Can I Retire?

The age at which you can retire and collect full Social Security benefits depends on the year you were born. Starting with people who turn 62 this year, the full retirement age is gradually going up, from 65 to 67. Here’s the breakdown:

Year of Birth -- Full retirement age

1937  -- or earlier 65
1938 -- 65 and 2 months
1939 -- 65 and 4 months
1940 -- 65 and 6 months
1941 -- 65 and 8 months
1942 -- 65 and 10 months
1943-54 -- 66
1955 -- 66 and 2 months
1956 -- 66 and 4 months
1957 -- 66 and 6 months
1958 -- 66 and 8 months
1959 -- 66 and 10 months
1960 and later -- 67

• Fifty-two percent of workers choose to start collecting Social Security benefits as soon as they can at age 62.
• The gradual increase in the normal Social Security retirement age starting this year was passed by Congress in 1983.
• The current average monthly benefit for retirees is $804 for an individual, $1,348 for a couple.
• The top monthly payment for an individual turning 65 this year is $1,433, or $17,196 a year.

Source: Social Security Administration

ON A PLASTIC RAFT IN THE SARGASSO SEA

IN MARCH 1992, a man living near Boston, Mass., received a bill for his as-yet-unused credit card stating that he owed $0,00. He ignored it, and in April, he received another and threw that one away, too. The following month the credit card company sent him a nasty note stating they were going to cancel his card if he didn’t send the $0.00 by return mail. He called and was told it was a computer error and that they’d take care of it.

The following month, he decided that it was about time he tried out the troublesome credit card, figuring that if there were purchases on his account it would put an end to his ridiculous predicament.

But in the first store where he presented his credit card he found that it had been cancelled. He called the credit card company, who apologized for the computer error once again and said that they would take care of it. The next day he got a bill for $0.00 stating that payment was now overdue.

Assuming that because he had spoken to the credit card company only the previous day, the latest bill was yet another mistake, so he ignored it, trusting that the company would sort the problem out. The next month he got a bill for $0.00 stating that he had 10 days to pay his account or the company would have to take steps to recover the debt.

Finally, giving in, he thought he would play the company’s game, and he mailed them a check for $0.00. The computer duly processed his account and returned a statement to the effect that he now owed the credit card company nothing at all.

A week later, the man’s bank called him, asking him what he was doing writing a check for $0.00. After a lengthy explanation the bank replied that the $0.00 check had caused their check processing software to fail. The bank could not now process ANY checks from ANY of their customers that day because the check for $0.00 was causing the computers to crash.

The following month, the man received a letter from the credit card company claiming that his check had bounced and that he now owed them $0.00, and unless he sent a check by return of post they would be taking steps to recover the debt.

Source: Institute of Management Accountants’ magazine.

Thanks to Gail Gillies for submitting this humorous urban legend. Gail notes "In case readers don’t know, the Sargasso Sea is in the middle of the ocean (having crossed it by ship myself last year) where there is nothing, no life, not even one bug or any microorganisms."

The policy of this organization prohibits the sale, distribution, or other use of the SBBA mailing list or e-mail server list for other than SBBA business.

Editor of this month’s Newsletter was Caron D’Orazio. Many thanks to Caron Garliepp for proofreading this issue!  Next month’s Editor will be Jo Rogers.