The end of the calendar year might seem like it's a long way off — but it isn't. For payroll purposes, closing out 2017 starts right now. To help you get started, here are 10 handy year-end tasks to tackle in October and November.
1. Verify Your Company Information
This includes items such as tax ID numbers, the delivery address for your W-2 forms and your company's email address. This may seem very basic, but small clerical mistakes can create problems that you most likely won't have time to tackle.
2. Verify Your Employee and Contractor Information
Make sure the information is correct (and up-to-date) for each of your employees and contractors. Did anyone move, get married or have children? Are everyone's social security numbers valid? It's worth taking a moment to make sure you don't get tripped up by an easily avoidable mistake.
3. Prep Payroll Processing for Thanksgiving
This year, Thanksgiving falls on Thursday, November 23. If your check date falls on this date, please adjust it to avoid delaying your employees' direct deposits and delivery of paychecks.
4. Make Sure You Have the Correct Employee Totals
Before your last scheduled payroll of the quarter, make sure you update any employee totals that you want to include in the quarter balances. This includes items such as manual and voided checks, taxable fringe benefits, paid time off and any other adjustments to employee wage and tax amounts. Special Note: If you run a special payroll after the last day of the quarter, the government may charge penalties and interest based on their deposit and filing deadlines for taxes.
5. Start Verifying Earnings and Deductions
Do this by viewing your employees' year-to-date earnings and deductions. Be sure to verify for both current and former employees.
6. If Applicable, Review Third-Party Sick Pay
Federal law requires the reporting of taxable and nontaxable sick payments made from a third party — including taxes withheld on those payments. If third-party sick pay is not reported by the third party, it must be reported by your organization on the W-2 forms of applicable employees.
7. If Applicable, Report Fringe Benefits
Any fringe benefits your company provides — such as providing a business vehicle to commute to and from work — are taxable and must be included in the employee's pay.
8. Learn More About the Affordable Care Act (ACA)
Many employers have to report health coverage information to their employees and the Internal Revenue Service annually to meet ACA-required obligations. This includes employers with 50 or more full-time and full-time-equivalent employees, small employers with self-insured health plans and any business connected to another company through joint or full ownership that, when combined, meets the 50-employee threshold. Click here to learn more about your ACA responsibilities.
9. Find Out If You Are in a FUTA Credit Reduction tate
If your company operates in one or more states that are subject to higher taxes under provisions of the Federal Unemployment Tax Act (FUTA), plan to pay higher FUTA taxes per employee. Special Note: The federal government will verify on or about November 10 which states will be affected and the increased rates by state.
10. Prepare Payroll Processing for Veterans Day Impact
Veterans Day is observed on Friday, November 10 and some banks may be closed. If your check date falls on this date, please adjust it to avoid delaying your employees' direct deposits.
Follow these 10 easy tips in October and November, and you'll be well on your way to a successful year end.
This content provides practical information. When in doubt, consult with an experienced legal professional for advice.
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