That ice cream sandwich you just bought will taste even sweeter later if you take time now to perform some general payroll maintenance chores and early year-end tasks.
- Download the Social Security Administration’s 2017 W-2 e-filing specs, Electronic Filing of W-2s (EFW2). Surf to www.ssa.gov/employer and click on Publications & Forms.
- Check that the additional 0.9% Medicare tax is being withheld properly; find and fix errors now; inform high earners that they may refile their W-4s to account for the additional tax.
- Schedule routine maintenance for your old computer systems. Reason: Relevant tax and wage and hour data may still reside there.
- Total employees’ supplemental pay to see if it’s approaching the $1 million mark. Reminder: Disregard W-4s and withhold at the 39.6% rate on all subsequent supplemental pay.
- Ensure that employees are properly reporting all of their working time and that they complete exception reports when they work overtime.
- 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 SSNs.
- Reduce the collection and retention of employees’ personal identifying information (e.g., names and Social Security numbers); review the PII you already have and determine whether you really need it.
- Remind employees who use self-service payroll systems that you don’t solicit their PII, and that they should report any attempts to solicit this information to IT as a phishing attempt.
- 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.
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.