Same Thing, Different Year...
As each year rolls into Q4, the same questions pop up...
As a business owner or manager, there are several things you can do to reduce issues and fees
Save unnecessary fees and time!
Be sure to verify your company information, EIN, address, etc. before the end of the year.
Also, task your employees to verify their information such as name spelling of name changes, SSN, and address. Confirming this information before W2s and 1099s are generated will save a lot of time and money!
Is your company an S-Corp?
Does your business pay health insurance on behalf of owner(s)/shareholder(s)? Report this amount as “S-Corp Insurance”. Your payroll company or accountant can help you with this. S-Corp insurance must be included on owner(s)’s W2 in Box 14.
Are you paying out bonuses at year-end?
Bonus payrolls should be completed before 12/31 of the calendar year to avoid potential fees for back-dated payrolls.
Be sure to specify:
1. Whether voluntary deductions should be withheld, (Garnishments, 401K, IRA, etc.);
2. whether the employee wishes the tax withholding to be changed for the bonus, (if so, the employee must provide an updated W4 for the change and another to resume previous elections;
3. Preference as to whether bonuses are to be direct deposited or in a paper check;
4. If the bonus amount(s) provided is/are gross or net.
Additional Year-End Items
Know which Form I-9 is needed for your contractors!
Starting in 2020, a new 1099 form was added, the 1099-NEC.
You may have additions for payroll that should be reported before your final payroll of the year:
1. Manual/paper checks written directly to employees/contractors during the year outside of payroll that need to be included in W2s/1099s;
2. Contributions to 401K/IRS/HSA that were not included in a previous payroll;
3. Outstanding reimbursable expenses for the calendar year.
State Unemployment Rate Change
Notify/update your payroll provider/accountant with the updated unemployment rate for your company as soon as it is available. This information is usually updated by 2/15 of each year and generally available to you by logging into your state’s DOL website to access your account. Some states still send “snail mail” notices, but most only update in each sompany's account - be sure to log into your DOL account to get this information. Not updating can cause added/unexpected payments later in the year
