For finance and accounting personnel, year-end tasks can be daunting — A checklist to keep you on track
Tasks and deadlines related to payroll
- Review employee information that can affect W2 reporting such as name, address and social security number. Check for eligibility to your company’s retirement plan. Don’t forget about terminated employees. If they worked during the year, they will also receive a W2.
- Many employers pay year-end bonuses. Make sure you schedule enough time for this task. Remember to remove discretionary deductions from the employee bonus checks such as health insurance, dental, etc.
- If your company provides more than $50,000 in life insurance to employees, remember to tax the difference on their final check if you are not already doing this each pay period.
- Many employers will be required to report the cost of their employer sponsored group health plan coverage on the employee 2013 Form W-2. This reporting is informational only, showing the value of the employee's health care benefits, and does not affect the employee's tax liability. Employers who filed 250 or more Form W-2s for the 2012 calendar year will be subject to the reporting requirement on W-2s for 2013.
- If your company has disability plans and any employee has used these benefits during the year, you may have third-party sick pay to include on W2s. This also affects employer FICA and Medicare.
- Print and distribute your W2s to employees no later than Jan. 31 of the following year.
- 941 reports for the fourth quarter are due Jan. 31 of the new year. Remember tax payments are due before that based on your payment schedule.
- Unemployment taxes are generally paid quarterly and will be due Jan. 31 of the following year.
- Remember to file your quarterly unemployment report as well as your annual 940 (Federal unemployment). Both reports are due Jan. 31 of the following year.
- IRS and state copies of W2s are due no later than Feb. 28 of the following year.
- Verify your 1099 information for reporting. You should have been requesting W9 forms from your vendors throughout the year so you have their EIN on file. If not, take some time to get in touch with them to provide you with this information. 1099s are due to the vendors no later than Jan. 31 of the following year. State and federal copies are due no later than Feb. 28 of the following year.
New Year planning
- It is recommended that employees review their W4 withholding and make changes if necessary.
- Many employers provide pay raises at the beginning of the year. Before processing your first pay of the New Year, make sure you have the updated salaries. This could also include changes in discretionary deductions such as health care, dental, etc.
- You will have received your new state unemployment rates in November-December. Make sure to update in your payroll system before processing the first payroll.
- Update your sick and vacation pay prior to processing your first payroll.