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Bracketology, Payroll style

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in Office Management,Payroll Management

Brackets for Payroll mean tax brackets, not the betting sheets for March Madness college basketball playoffs. Now that you’ve finished with 2016 year-end, it’s time to turn back to items that fell through the cracks.

Confirm that all monthly, quarterly and annual balances are accumulating properly; pay attention to adjustments.

Scan the computer you use to make tax deposits for viruses and sweep them out. Winnow the number of employees who have access to this computer.

Review the Payroll privacy policy. Identify touch points: What information are you collecting, who controls it, how is the information protected and who has access to it?

Verify that employees aren’t deferring more than $2,600 into their health flexible spending accounts. If they are, refund and tax the excess as wages.

Check that child support withholding orders are in standard income withholding order format.

Review any change-of-address notifications from the IRS. Ensure that all your 941s are consistent: St. or Street; Ave. or Avenue.

Photocopy timely filed state unemployment returns; this is the proof that will allow you to take the full FUTA credit on Form 940. Confirm that SUTA deposits are made under the proper company name and state ID number.

Scan undeliverable W-2s and the postmarked envelopes. Shred the paper copies.

Have the IT department test the payroll system for employees’ names/Social Security Numbers, W-4s, ghost employees and withholding on taxable fringe benefits.

Purge the master file of terminated employees.

Confirm that health care information is accumulating properly for Form1095-C reporting; identify holes and fill them. Review Part II coding and ensure that the coding is correct.

Ensure that telecommuters are properly recording their time and taking required breaks.


A step-by-step payroll compliance guide to each pay period, month and calendar quarter of the year is now available. Download it free here.

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