Preparing to end the payroll year

Whether you prepare payroll in-house or outsource the task, there are a few end of year items that should be completed.

Update employee contact information:  Make sure that you have correct and complete social security numbers and addresses for all employees.

Obtain all needed information to make year-end adjustments to payroll records and W-2’s.  There are a few common adjustments that should be considered.  Some of the more common adjustments include:

  • personal use of company vehicles
  • employer paid term life insurance in excess of $50,000
  • employer paid health insurance for S-corp shareholders owning 2% or more of the company
  • bonuses
  • non-cash payments
  • third-party sick pay
  • employer paid education (not related to the job)
  • non-qualified moving expenses
  • non-accountable plan reimbursements or allowances
  • excess contributions to qualified plans
  • tip allocations for tipped employees
  • non-qualified deferred compensation plans

Confirm that information required to be reported on W-2’s related to retirement plan participation, employer sponsored health care plans, health savings accounts and flex spending accounts has been accumulated.

Reconcile the information between your payroll records and your quarterly and annual tax returns and address any variances prior to filing.

Visit the IRS website at www.irs.gov to make sure you have the most recent forms such as 941 and 940.

Order W-2 forms if you plan to print the W-2’s in house.

Notify employees that unused amounts in flexible spending accounts that don’t allow grace periods will be forfeited at year-end.

Collect new form W-4 forms for any employees that need to make a change to their withholding for 2018.

If you would like assistance with any of these tasks, please Contact Us