We are toward the end of December, which means 2018 is coming to an end. For all of the small business owners out there, the end of each year is the time when you need to process payroll for the past calendar year. Processing payroll at the end of the year can be complex and detail-oriented requiring you to calculate taxes and compensation totals for each employee. Luckily, there are a few simple payroll processing tips you can follow at the end of the year.
Update Employee Contact Information
One of the most important payroll processing tips to follow is to ensure all employee information is correct on each W-2 form. You want to ensure each employee’s W-2 form has their correct name, address, and social security. If you turn in the forms to the IRS with any missing or incorrect information, then you might be subject to penalty, which can be costly. So, make sure that the information on each employee form matches the information on their social security card.
Process Year-End W-2 Adjustments
When processing your last payroll, you want to verify that all cash and non-cash income has been recorded and taxed properly for each employee. There are several W-2 adjustments you need to account for, such as personal use of a company vehicle, bonuses and other incentive pay, and third-party sick pay. You want to make sure all of the information is accurately reported on each employee’s W-2 and tax return statement.
Verify Vendor Information
When processing end of the year payroll information, you need to make sure your vendors are included. You will need to fill out a 1099 form and report any income you paid them that accumulated over $600. You want to make sure that the information on the form is correct for each vendor so that you do not receive penalties from the IRS.
PL Consulting Can Help You Plan Your Budget!
PL Consulting offers a diverse range of bookkeeping and other financial services. Each of our services is customized to fit the needs of our client and his or her business plan. Our team can help you with each step of your business from organization, to budget, to financial maintenance. We are located in Pikesville at 119 Old Court Rd Baltimore, MD 21208. Contact us at 410.764.3731 or firstname.lastname@example.org so that we can assist you with your bookkeeping needs. Remember to stay up to date with everything PL Consulting by following us on our social media platforms via Facebook, Twitter, and Google+.Posted on