You don’t know where you’re going unless you know where you’ve been. That’s especially true for year-endduties. To help you get your bearings for year-end 2015, we’ve pulled together a list of critical action items for your immediate consideration.
So much to do, so little time
The single most important thing you can do to ward off tax penalties for failing to file correct W-2s is to ensure that employees’ names and Social Security numbers (SSNs) match. You can use the Social Security Administration’s Social Security Number Verification Service to check employees’ name/SSN combos.
But you can’t stop there. Think about the following:
- Double-check employees’ pretax deductions, coding for Box 12 and year-to-date figures
- Ensure that payroll-related items (e.g., life and disability insurance) are processed before W-2s are processed
- Balance quarterly reports and Forms 941 with the general ledger
- Verify that employees’ addresses and phone numbers are correct
- Calculate car allowances, insurance costs, etc., for year-end adjustments
- Ensure that for accounting purposes, all income and expenses are accounted for prior to calculating shareholders’ year-end bonuses.
Those who don’t learn from mistakes
Yes, it’s only October. But year-end takes planning, lots of it and in advance. Best strategy: Spread out year-end duties to avoid a crunch in December. So year-end neophytes don’t make the same mistakes others have made, here are some more pearls of wisdom:
- Balance gross-to-net and taxable wages quarterly
- Go slowly and keep checklists of items
- Keep on things daily from Thanksgiving to the end of the year
- If possible, make sure that terminated employees’ addresses are correct.