Dog days of summer slowing you down? You can keep cool by keeping busy. Take some time now to make sure your Payroll i’s are dotted and your t’s are crossed.
√ Download the Social Security Administration’s 2014 W-2 e-filing specs, Electronic Filing of W-2s (EFW2). Surf to www.ssa.gov/employer and click on Publications & Forms.
√ Inform high earners when their wages become subject to the additional 0.9% Medicare tax, and that they may refile their W-4s to account for the additional tax.
√ Total employees’ supplemental pay to see if they’re approaching the $1 million mark. Reminder: Disregard W-4s and withhold at the 39.6% rate on all subsequent supplemental pay.
√ Check that backup withholding is occurring for independent contractors who didn’t supply their Taxpayer Identification Numbers prior to the first payment.
√ 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; 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 Finance as employees max out on the Social Security and state unemployment wage bases.
√ Coordinate with Accounts Payable information reporting for deceased employees, employees who win prizes at company events and employees who have outstanding travel allowances or other taxable disbursements made under nonaccountable plans. Reminder: W-2s are required if the company supplies prizes or distributes vendor-supplied prizes.
√ Work with HR to determine the proper tax status ofsuch as gas cards, employer-provided vacations, etc.