With the new, earlier 2017 deadlines for filing W-2's it’s more important than ever to make sure everything is efficient, accurate, and in order for a smooth transition into the new year. The key is efficient Review and Verification - you don’t want to have to do it twice! So here are some tips to help:
Before the last payroll at the end of the calendar year:
1. Review and verify employee data thoroughly
Employee Social Security Numbers (SSN) and addresses should be verified and updated if necessary - the most common mistakes are for W2 or 1099 forms to be filled out with incorrect name or SSN. Names need to be the legal form as shown on government ID and SSN need to be in the correct format.
2. Review and verify employer data thoroughly
Federal, state and local Employer ID Numbers (EIN)s need to be verified. You can find more information on the issuing and verifying of EINs here. Any employee changes should be reviewed and prepared for proper reporting.
3. Record, verify and schedule all year end changes:
Any taxable fringe benefits such as cash awards and prizes, laptops or excessive mileage reimbursements need to be properly recorded for correct withholding amounts. There are quite a few that are specified as non-taxable fringe benefit items such as health insurance, employee benefits or profit sharing plans and working condition fringe benefits that are provided so the employee can perform their job. You can find more detailed information here. Employee earnings and deductions should also be reviewed and verified. You’ll also want to review and schedule any special reports or changes.
- Make sure any end of the year bonuses or commissions and next year payroll adjustments are verified and scheduled.
- Confirm any necessary W-4 filings for employees who need to record circumstance changes. (Form W-4 Exempt employees must submit a new completed Form W-4 each year to stay Exempt)
- Do a review of any manual checks as well as any voided and reversed checks.
Before the first payroll at the beginning of the new calendar year:
1. Review the employer and employee data
Any discrepancies in address, SSN or other personal information should be noted and resolved and reporting of terminated employees should be verified.
2. Review wage tax and benefits
Any tax rate or taxable wage limit changes should be checked and adjusted for
Verify and ensure employee requests for fringe benefit deduction changes are applied
Verify any Earned Income Tax Credit requests
3. Re-review any necessary scheduling as determined by tax rate, wage limit or employee status changes.
Once the previous year has been reviewed for accuracy, prepare for the new year by reviewing information and scheduling for any necessary changes.