Payroll Year End
Business year end can be a stressful time for employers. Luckily, we have you covered with the resources you need to get you through year end without a hitch.
There is so much to consider when it comes to payroll year end.
From a payroll and human resources perspective, business year end is one of the most important parts of successfully operating a business. Our team has put together everything you need to ensure a smooth year end. We have compiled monthly tasks, important information, and handy resources to make year-end payroll processing easier.
Year-End Payroll Webinar
Check out our webinar overviewing year end and everything you need to prepare for.
Our Year-End Checklist is Here!
2022 is almost gone, and we are preparing for year end. We need your help! Our Year-End Checklist is here to ensure a smooth transition for your business into 2023!
This checklist will reduce your year-end stress and provide guidance to you on items such as:
- Steps you need to take
- Information for you to review to avoid fines
- Deadlines to think about and meet
- Paperwork you will have to collect
- 2023 holidays that will affect payroll
Download your copy now!
A few highlights from our year-end checklist
Some Things to Consider in November
Verify all your company information is correct
Be sure to have the correct data to when filing your taxes. This includes:
- Federal & State tax ID numbers
- Legal name & business address
- State Unemployment Tax rates
Prepare yourself for Affordable Care Act annual reporting
If you and your associated businesses are considered applicable large employers and have more than 50 full-Time equivalent employees, you will need to prepare and submit 1094-C and 1095-C forms to your employees.
Begin gathering year end W-2 adjustments
W-2 adjustments are often non-cash contributions, but include the following items:
- S-Corporation shareholders’ health insurance premiums and mileage reimbursements
- Group term life paid on behalf of employees over $50,000
- Third party sick pay
- Personal use of a company vehicle
- Non-cash payments like gift cards or other “fringe benefits”
Prepare for Veterans Day & Thanksgiving payroll processing
Veterans Day is Friday, November 11th. Banks will be closed so submit your payroll early!
Thanks giving is Thursday, November 24th. Banks will be closed so submit your payroll early!
December Tasks to Complete
Process all manual & voided checks
Have you paid employees by manual checks outside of payroll? You must record those manual checks on payroll to ensure that all wages are legal. Further, third party sick pay, personal use of an employer-provided vehicle, qualified moving expenses, club memberships and more must be reported on W2s!
Review 3rd party sick pay
Third party sick pay is an insurance benefit often called short or long-term disability insurance. If an employee has used this benefit during the year, you will likely need to report taxes and wages through payroll. While these payments are not made through the employer, the taxes must be reported by the employer. Your disability insurance provider will send you quarterly statements.
Report fringe benefits
A fringe benefit is any form of payment for performance of services. Generally, these are things like gift cards, employee gifts, personal use of a company car, gym memberships, etc. These are considered taxable wages and must be reported on an employee’s W-2.
Process your final payroll of the year
Please carefully review your final payroll of the year. There are several items to review:
- Employee names, addresses and social security numbers should be reviewed and accurate.
- Final benefit deductions, PTO pay outs, fringe benefits, etc are accurate.
Items to Finish Up in January
Submit 1099s for preparation
You must provide 1099s to any independent contractors who have worked for you in 2022 no later than January 31st!
Review and update 2023 retirement contributions
Many employees or owners like to maximize pre-tax retirement benefits. Update employee deduction amounts to ensure the maximum contributions are made for the year. You can find 2023 limits here.
Download, print & display current labor law posters
You must display both federal and state labor law posters prominently in your business for all employees to review. These are published for free by the federal and state governments. You should download, print and display the most accurate labor law posters which are available here.
Send W-2 and 1099 forms to your employees
It is your responsibility to distribute/mail W-2s & 1099s to your employees before January 31st!
Year-End Tips
A few additional tips to consider when it comes to year-end planning.
Double Check Social Security Information!
The Social Security Administration charges a fee to correct wages posted incorrectly. The SSA offers a free tool on their website to check social security information, which can help you avoid filing incorrect information.
The IRS requires that employee Forms W-2 and 1095-C must match exactly what is printed on social security cards (hyphens and all). Failure to verify this information is correct may result in penalties.
Consider Electronically Filing Your W-2s
The SSA requires that large employers filing more than 250 Form W-2s must file them electronically. A waiver must have been granted by the SSA for any employer filing more than 250 W2s manually.
You may file electronic W-2s for free using the SSA’s Business Services Online website here.
Remember New State and Federal Legislation Changes for the Upcoming Year
Depending on what state you do business in, there may be some new compliance challenges to consider. For Maine businesses, start preparing for the State’s retirement mandate that begins in April of 2023. You can also check out our webinar about this program on our YouTube channel.
Additionally, remember to be in compliance with the new vacation payout requirement that starts January 1st!
Can’t find what you’re looking for? Contact our local team.
We’ll stay in the weeds to manage your payroll, Human Resources, and compliance needs.
