Round out your summer schedule by making time to perform these general payroll maintenance chores and early year-end tasks.
√ Download and review changes to the Social Security Administration’s (SSA) 2011 W-2 e-filing specs, Electronic Filing of W-2s (EFW2). Download them at www.ssa.gov/employer/efw/11efw2.pdf.
√ Confirm that your software can accept the SSA’s new process for assigning Social Security Numbers (SSNs) randomly. Alert third-party vendors to this change.
√ Check with your bank regarding bank holidays for the rest of the year.
√ Sweep your payroll system clean of Individual Taxpayer Identification Numbers (ITINs). The IRS provides ITINs to aliens for tax purposes unrelated to work; employees always have SSNs.
√ Scan undeliverable W-2s and the postmarked envelopes. Then shred the paper copies. Note: Be sure IRS auditors can read the scanned forms.
√ Have the IT department test the payroll system for employees’ names/SSNs, W-4s, ghost employees and withholding on taxable.
√ Purge the master file of terminated employees.
√ Compile a list of taxable fringes (e.g., personal use of employer-provided home computers or company cars, moving expenses), and decide how they will be recorded in the general ledger.
√ Alert Finance as employees max out on the Social Security wage base and state wage bases.
√ Work with Accounts Payable to coordinate information reporting on deceased employees, employees who win prizes at company events and employees who have outstanding travel allowances and other taxable disbursements made under nonaccountable plans. Reminder: W-2s are required if the company supplies prizes or distributes vendor-supplied prizes.
√ Total employees’ supplemental pay to see if they’re approaching the $1 million mark. Reminder: Disregard W-4s and withhold at the 35% rate for all subsequent supplemental pay.