3 Actions You Can Take To Make Payroll Processing Easier At The End Of The Year
At the end of the year, you are going to have to process all of your payroll and create W-2's for all of your employees. You can avoid errors with end-of the year payroll processing by updating employee contact information, preparing for ACA reporting and checking all adjustments.
#1 Update Employee Contact Information
The first thing you need to do is update all employee contact information. Go through and check all of your employee information and make sure that you have the social security numbers and addresses for all of your employees. Double check the spelling and make sure that there are not any spelling errors with your employee's names. Make sure that you have employees' full names and not their nicknames on their tax documentation.
Send out a contact information check to your employees and have them verify that their name and address are correctly entered into your payroll system. Submitting the wrong information to the IRS can literally cost you money, so it is worth it to get this information correct.
#2 Prepare for ACA Reporting
You are going to have to have to report what type of insurance you offered your employees as part of the Affordable Care Act. You don't have to finish this paperwork until the new year, but getting a head start on ACA reporting can be helpful.
You are going to need to figure out how many full and part time employees your company employed and for how much of the calendar year. If your business had less than fifty employees, you do not have to participate in ACA reporting if you don't offer insurance. If you offer full insurance to your employees even though you have less than fifty employees, it is up to your insurer to file this information.
If you have more than fifty employees, there are specific forms you will have to fill out for the insurance that your company offers.
#3 Check All Adjustments
Finally, you need to make sure that all adjustments have been properly recorded and taxed before you close out your payroll for the year. Common adjustments include sick pay, company provided transportation, company provided parking, moving expense reimbursements, bonuses, incentive pay, employer paid-education and any other non-cash payments or bonuses that employees received throughout the year.
Before the end of the year, verify the name and contact information for all employees, make sure that all adjustments are properly reported in your payroll system, and figure out if your company needs to engage in ACA reporting this year. For more information, contact small business accounting services.