In the early days of my payroll career, year-end meant long days stretching into long nights – it’s a common occurrence in the payroll department during year-end. I often wondered if there was something missing in our processes that required such a last minute effort to get W-2s and tax reporting out the door.
Preparation and implementing best practices was the key to enjoying the holiday season and reducing the stress involved in the process.
Year-end can be a very stressful time. In the payroll world, the culmination of all the year’s work is summed up in the W-2, 1099 and tax reporting processes. It’s a report card of how well we followed the many, many regulations we deal with every day.
Start Early
Preparation for year-end begins on January 1st. Many of you have heard this before but what does that mean?
- Are your payroll reconciliations completed on at least a quarterly basis?
- Have you reviewed your earnings and deduction codes for proper taxation?
- Are the earnings and deductions mapping correctly to the W-2 boxes?
- Have you reviewed the 2020 W-4 and requirements?
- Have you reviewed current year legislative changes to ensure compliance?
- Have you spoken to other departments such as AP and HR regarding imputed income entries and how to handle these?
- Have you verified current addresses, correct name (as on SS Card) and personal data (SSN/TIN) information with your employees?
- Have you created a year-end checklist early in the year to ensure tasks are being accomplished?
- Have you identified the requirements for the Puerto Rico and other U.S. Territory returns?
- Do you know the requirements for your Canadian or other foreign employees?
Stay Current with Legislative Changes
Your service provider sends updates as laws and regulations change. Have you incorporated all of those changes and ensured that your policies and procedures have been updated as well?
Did you know?
- The due date for filing Form W-2 with the Social Security Administration is now January 31, 2020, regardless of whether you use paper forms or file electronically?
- Extensions of time to file Form W-2 with the Social Security Administration are no longer automatic?
- After January 1, 2017 you may request one 30-day Extension of Time to File and this does not affect extensions of time to furnish Form W-2 to employees?
- Do you know the reasons and conditions under which Social Security Administration will reject wage reports?
- The Affordable Care Act requires employers to report the value of health coverage in Box 12 Code DD?
The responsibility for accurately filing information is ultimately yours – not your payroll provider’s – so you need to make sure you’re in compliance!
Most Common W-2 Mistakes:
The IRS, SSA, and state/local governments report that there are common mistakes that are made by employers when submitting W-2 and other tax information. The following are mistakes seen most frequently:
- Omitting the decimal point in the numerical fields
- Inappropriately check the “Retirement Plan” checkbox in Box 13
- Incorrectly formatting the employee’s name in box e.
- Federal wages in box 1 don’t match wages in state and local boxes (with several exceptions)
- Tax withholdings are in excess of maximum limits
- Codes in Box 12 are missing or inaccurate
- Codes mistakenly reported in Box 14 should be in Box 12
How Can PayTech Help?
We help our clients prepare for year-end – it’s what we do! We provide our clients with seasoned payroll professionals who have mastered the art of year end processing.
- We assist our clients with ensuring their system and processes are setup to accurately report wages, taxes and benefits to the IRS, SSA, and all regulatory authorities.
- We help eliminate the stress – we know the regulations, processes, and systems required to make you successful.
- Do you have the extra time? Can you fit the responsibility into your already demanding schedule?
- Does your company have new personnel, increased processing, or other unique challenges this year?
- We provide support to fill any gap you have to make sure these activities are completed timely and accurately
Contact us – we can help!
