1. Verify all information that will transfer to the W2s.
Company information to verify for payroll would be the company name, address, and that the EIN number is accurately listed. Employee Names, social security numbers, and current addresses.
2. Be sure that all earnings are accounted for.
As well as all earnings that may have occurred outside of normal payroll. This can include handwritten checks, holiday gift cards, cash bonuses, taxable fringe benefits, etc.
3. Run any Special Year-End payrolls.
This may be bonuses for your employees or if you are an S-Corp owner this may be a special payroll run to be sure that you have hit the YTD salary amount that is necessary for you to be compliant with IRS regulations for reasonable compensation.
4. Determine which employees should be paid for unused time off.
Or the amounts that need to be carried over. This is 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 that you have enough time for Direct deposit and tax deposits to be made by deadlines.
7. Confirm all money is properly allocated 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 be sure that you have all of your notices from each agency and that your tax deposit frequencies are accurate. Always keep notices and letters from departments regarding your accounts.
9. Verify employee wages.
After final payroll is processed, verify employee wages before creating the W2s and sending out W2s. Take the time to verify that the information is accurate.
10. Determine how employees will receive their W2s.
Don’t forget to also file your 1099s to each contractor with at least $600 earnings.
If you need payroll assistance with your W2s or 1099s, please reach out to us and Tax Time can help you get these filed properly. We also offer payroll services throughout the entire year that keep you compliant throughout the year, file the necessary reports throughout the year, and also take care of W2s and 1099s at the end of the year. You can set up contractor pay through us and also utilize our HR services to help your business. Give us a call today!