1. Verify all information that will transfer to the W2s.
Company information to verify for payroll would be the company name, address, and EIN accurately listed. Employee Names, social security numbers, and current addresses.
2. Account for all earnings, even outside normal payroll.
This can include handwritten checks, holiday gift cards, cash bonuses, taxable fringe benefits, etc.
3. Run any Special Year-End payrolls.
This includes bonuses paid to employees or, if you are an S-Corp owner, a special payroll runs to ensure you have hit the YTD salary amount necessary to comply with IRS regulations for reasonable compensation.
4. Determine which employees require pay for unused time off or if you must carry over the amounts.
This is not only based upon company policy, but now is the time to either pay these out or determine what is lost or carried over into the next year.
5. Determine who has benefit enrollment changes for next year.
You want to be sure that you have this list ready and accurate to put in after the final payroll and ready to process before the next payroll run.
6. Determine Payroll Deadlines for final payroll.
Be sure none are falling on a banking holiday, and you have enough time to make direct deposit and tax deposits before the deadlines.
7. Properly allocate all money into the appropriate W2 Boxes.
- 401(k) deferrals = Box 12, code D
- Total medical premium costs = Box 12, code DD
- Retirement plan or third-party sick pay = Box 13
8. Verify company tax rates that are subject to change.
This can be unemployment tax, disability rates, worker’s comp rates, etc. This is a great time to have all of your notices from each agency and ensure that your tax deposit frequencies are accurate. Always keep notices and letters from departments regarding your accounts.
9. Verify employee wages.
After the final payroll is processed, verify employee wages before creating the W2s and sending out W2s. Take the time to confirm that the information is accurate.
10. Determine how employees will receive their W2s.
Don’t forget to file your 1099s to each contractor with at least $600 earnings.
If you need payroll assistance with your W2s or 1099s, please contact us, and Tax Time can help you get these appropriately filed. We also offer payroll services that keep you compliant throughout the year, file the necessary reports, and take care of W2s and 1099s at the end of the year. You can set up contractor pay through us and utilize our HR services to help your business. Give us a call today!