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Bubble, bubble, stay out of payroll trouble

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in Office Management,Payroll Management

At the end of the regular season, come NCAA tournament time, college basketball teams don’t want to be on the bubble—maybe in The Big Dance, maybe out. Payroll pros don’t like being caught in the middle either. Take care of these items now to stay in control of your own destiny at work.

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 that computer.

Work with finance on the amount of gross receipts for the R&D payroll tax credit and with HR for the tax credit for paid FMLA leave.

Sign up for email alerts from the IRS at www.eftps.gov/eftps/. The IRS will email you when your third-party payroll provider accesses EFTPS. 

Verify that employees aren’t deferring more than $2,700 into their health flexible spending accounts. If they are, refund and tax the excess as wages.

Ensure that employees are reporting their entertainment and food/drink costs separately.

Review any change-of-address notifications from the IRS.

Ensure that your 941s are consistent: St. or Street; Ave. or Avenue.

Check backup withholding for independent contractors who didn’t give you their TINs prior to the first payment and for those whom you’ve received a B notice from the IRS.

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 IT 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.

Respond promptly to the Social Security Administration’s EDCOR or Employer Correction Letters.

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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