Start Your Year-end Right With These Essential Steps
October 12, 2020
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The year-end season is a hectic time for all businesses. With important deadlines and regulations, it is best to start your year-end preparation early. Below is a checklist of standard items that you can start reviewing today.
By following these essential steps, you can start your year-end right and ensure a smooth process moving forward.
Verify your company information
Review and verify your company information, such as address, email, and tax IDs in your company’s system.
During the year, many businesses were disrupted because of Covid-19 and the pandemic mitigation efforts. As a result, you may have changed your information, such as your delivery address. It is important to verify this information to ensure your W-2s are delivered to the correct location.
Verify your employee information
Review each employee record; verify that the Social Security numbers are entered correctly. In addition, verify that each employee has the proper name and mailing address. This includes any terminated employees. The name should match what is on the employee's Social Security card. Titles should not be included with an employee's name. Also, verify that the primary address is not a P.O. Box.
ECCA Payroll+ provides an Employee Verification Service (EVS). As part of this service, they produce SSN verification reports and notify the respective clients of any discrepancies that need corrected.
Be aware of upcoming bank holidays
Because banks will be closed, consider adjusting your payroll processing schedule if your check date falls on one of these days. By processing your payroll earlier, you can ensure your employee’s direct deposits arrive on time.
- November 11th
- November 26th
- December 25th
- January 1st
Review any fringe benefits (if applicable)
Since they are considered taxable, you must report any fringe benefits on an employee’s W-2. Some examples of fringe benefits include:
- Group term life insurance (over $50,000)
- Personal use of an automobile
- Moving expenses
- Dependent care benefits
Review any third-party sick pay (if applicable)
Contact your third-party administrator for any sick pay amounts that need reported on an employee’s W-2. Keep in mind that your third-party administrator may issue their own W-2 for these amounts.
Consider paperless payroll and W-2s
By implementing a paperless payroll solution, you can make your year-end processing more efficient by having your tax documents easily accessible.
With ECCA Payroll+, all your tax documents are delivered to the DocuPortal. This provides you and your trusted advisors quick and secure access to important statements. In addition, your employees can get convenient access to their own W-2s by using MyStack.
Process bonus payrolls (if applicable)
While bonuses can be issued at any time, many companies issue them at the end of the year. Run any bonus payrolls before December 31st to ensure your employee’s W-2 amounts are accurate.
Process your last payroll
Run your last payroll of the year before December 31, 2020. If your company was eligible for any relief from the Families First Coronavirus Response Act (FFCRA) or the Coronavirus Aid, Relief, and Economic Security Act (CARES), you must record any earnings before December 31st.
Review any 1099s (if applicable)
Review any 1099s that you may have to issue; verify that the totals are correct.
Disclaimer: This information does not constitute legal, financial, or tax advice. Always check with your own legal and/or financial advisors as to how this information and others may apply to you or your business.