August is a slog. Forget the heat and humidity by organizing your Payroll tasks for the next four months.
√ Download and review changes to the Social Security Administration’s 2012 W-2 e-filing specs, Electronic Filing of W-2s (EFW2).
√ Work with the benefits department to ensure that medical loss ratio rebates attributable to employees’ pretax contributions are taxed properly.
√ Check reimbursement policies to determine whether employees are substantiating their business expenses.
√ Count blank check stock and review security procedures for signature stamps/plates.
√ Remove Individual Taxpayer Identification Numbers (ITINs) from the payroll system. The IRS provides ITINs to aliens for tax purposes unrelated to work; employees always have Social Security numbers (SSNs).
√ Scan undeliverable W-2s and the postmarked envelopes, then shred the paper copies.
√ 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 the finance department as employees max out on the Social Security wage base and state unemployment wage bases.
√ Coordinate with accounts payable on information reporting for 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.