For the majority of business professionals, the end of the year signals project completion, taking time off, and holiday celebrations. However, for busy HR and payroll administrators, this time of year means payroll, benefit and tax deadlines. There are several tasks that need to be accomplished near the end of the year, to comply with important federal and state requirements. Get the end of year tax and payroll forms you need here.
To help you get a head start on your small business payroll taxes for the final quarter, here is a year-end payroll checklist to follow.
1. Verifying Employee Data for Active and Terminated Employees
The end of the year is a good time to make sure that all employee data is up to date, and that your employee filing system is sorted out. Take a moment to remove terminated employees from your active employee files. Have all current employees fill out new emergency contact forms to be input into your payroll management system.
2. Paying Out Year-End Bonuses
If your company participates in a bonus program, such as a profit-sharing, sales incentives or employee savings programs, now is the time to get your payroll data together so that bonuses can be handed out at the company holiday event. Be sure to include all eligible employees who have met their annual requirements for the bonus.
3. Reconciling Gross Wages with Year-to-Date Wages on the Payroll Report
If you don’t already do this every quarter in your payroll department, take the time to run your year-to-date wage reports for the first 3 quarters of the year, and start reconciling them against your payroll reports. This will make your year-end small business tax and payroll responsibilities that much easier if all your numbers match up.
4. Updating Unemployment and Disability Insurance Rates
At this time of year, you will also want to file your IRS Form 940’s for FUTA purposes. Payroll administrators will also be on task to report any unemployment payouts and disability insurance to the government. If you have a payroll product that makes automatic updates, you will want to check to ensure you are processing updated unemployment and disability insurance rates.
5. Gathering 1099 Vendor and W9 Contractor Information
With the increasing use of independent contractors and outsourcing to vendors, your accounting department will need to update all 1099 vendor forms and W9 contractor information by the end of the year. 1099s should be sent out to anyone whom your business paid $600 or more for 2013 in services, according to the IRS. You must send them out before January 31 of the filing year, so start asking for those W9s now.
6. Processing of W-2’s and W-3’s
Along with your 1099’s, once your final December hours are logged and payroll is processed, it’s now time to process your small business W2s and W3s for employees. Make sure they are printed out, reviewed, and postmarked by January 31st to beat important IRS deadlines.
7. Managing Workers’ Compensation Audits
The end of the year is also a time to pull out your workers’ compensation and workplace injury reports to make sure that all reportable accidents and injuries have been reported. The Occupational Safety and Health Administration requires that OSHA form 300 and 300A (annual summary) be completed for the prior year by February 1st of the New Year. Audits must be documented to reduce workers’ compensation fraud.
Having your payroll taxes in order by the end of the year will keep your business running smoothly, so it’s important to have efficient payroll administration processes in place. SourceOne Partners is a South Florida-based business that can pair you with the perfect PEO or payroll service for your business. Whether looking for PEO services or payroll management in South Florida (Miami, Fort Lauderdale, or Palm Beach) or in the surrounding areas of New Jersey, Pennsylvania and New York, you can schedule a free PEO or payroll analysis today. Contact SourceOne Partners by emailing us or calling 561-674-0748 to speak with a PEO expert today.