Payroll Tasks Your Business Should Accomplish by Year’s End
As the year wraps up, much of your focus is likely on tax planning. However, there are also some payroll tasks to cover to set up your business for a successful 2018. Managing these issues effectively can help you maximize your resources and ensure you take care of your employees throughout the next year.
Prepare for bonuses
Because bonuses are subject to the same taxes as normal wages, determine the size of any bonuses you may wish to award and withhold the required taxes before the year’s end. Bonuses are especially popular during the holiday season, but it’s important to remember the potential pitfalls of not withholding the appropriate taxes.
Pay outstanding vendor balances
If you’ve relied on the services of a vendor or independent contractor at any point in the last year, you’ll need to ensure that they have been paid in full before the end of the month. Paying vendors should be as simple as closing out any outstanding balances you may owe them. Paying contractors will require you to request a W-9 for each contractor and file a 1099-MISC form with the IRS.
Update unemployment payments
If your business is responsible for paying into a state unemployment fund, you should receive a notice by the end of the year (or in early January) dictating any rate changes that have been implemented. If this is the case, notify your payroll service as soon as possible.
Consider healthcare costs
Be sure to report the annual amount of health insurance expenses paid by your business toward each employee to your payroll service, as they need to include this information on the W-2 forms that your employees will receive.
Not every business is responsible for providing its employees with healthcare. If you are unsure if your company has this obligation under the Affordable Care Act’s current employer mandate, we can help.
Review employee information
The year’s end is a good time to go through your payroll records and purge any irrelevant or inaccurate data. If some employees are no longer with your organization, or if they have undergone a name or address change in the past year, be sure to update their information accordingly.
Payroll taxes can be incredibly complicated, so be sure you take care of these and other tasks as you wrap up 2017.