As 2019 comes to a close, it is time to wrap up important tasks for your business and plan for the year ahead. One of the most critical aspects of your small business, which you should review, is your payroll. To best prepare for a great new year of business, and to avoid financial missteps and frustrated employees, make sure that you have completed the tasks on the following year-end payroll checklist.
Confirm Employee Information Before Completing Your Year-End Payroll Checklist
Make sure your records hold accurate information for each employee:
- Full legal name
- Social Security number
- Current address
- Any required contact information
It is crucial to confirm this information before you distribute a W-2 form to each employee.
Make Sure All Paychecks Are Recorded
Make sure that you have correctly recorded all paychecks from the year. Be sure to include all payments for commissions, bonus pay, or anything outside of standard payroll, such as retro pay. Don’t forget handwritten checks, and make sure you have also recorded voided paychecks from the year.
Verify Employee Wages and Benefits
Another crucial step in your year-end payroll checklist is verifying that every employee’s pay rates are correct. Additionally, check each employee’s benefits and deductions for accuracy.
Confirm Time Off Balances
If you offer your employees paid time off (PTO), you need to know how much they have used and how much they have left going into 2020. Depending on your policy, you will also need to inquire as to whether employees want to roll their accrued time or cash it out for the year. If you have a “use it or lose it” policy, notify employees of the dates of PTO expiration.
Order Forms W-2 and W-3
Order forms W-2, “Wage and Tax Statement,” and W-3 “Transmittal of Wage and Tax Statements” before the end of the year. You can buy these from the IRS or other authorized providers, and you will need to distribute both forms to your employees by January 31st so they can begin their 2019 tax returns.
Confirm Your Tax Rates
Tax rates and wage bases can often change year-to-year. Check and confirm the tax rates for federal, state, and local taxes such as:
- Federal income tax
- FICA tax (Social Security and Medicare)
- Federal unemployment tax (FUTA)
- State income tax
- State unemployment tax (SUTA)
- State-specific taxes
- Local income tax
Determine Your Deposit Schedule for 2020
Finally, as part of your year-end payroll checklist, you should determine your deposit schedule for payroll taxes. You can pay these mandatory taxes on a monthly or semiweekly basis.
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Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for emails or phone calls and will strive for open communication with our clients. Whether you are interested in business advising, tax preparation, bookkeeping and accounting, payroll services, Training + support for QuickBooks, or retirement planning, we have the expertise and years of experience to help. We serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of taxes, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, YouTube, and LinkedIn.