As we say farewell to 2019 and the last decade, there is a lot on your plate for you to complete before you can say, “Happy New Year!”.
Here are a few reminders for what you need to do as year-end approaches.
1. Review & Verify Employee Information
Review all your current employee information. Prove your data for accuracy, especially the details of:
- Birth Dates
- Social Security Numbers
- Correct Spelling of Names
- Up-to-Date Name Changes
- Accurate Tax ID Numbers for Independent Contractors.
- Local Taxes
It will save you from any pressure in the later processing of tax forms. Also, don't miss any non-employees. If you are using a contractor, you must check the person's tax ID number from the Form W-9.
2. File Year-end Payroll Tax Returns
You are liable for preparing payroll tax reports when you close each quarter of the year, so you should be used to this routine.
To refresh, here are the steps you need to take when filing these returns:
- You must file IRS Form 941, Employer’s Quarterly Federal Tax Return.
- You must also file Form 940, Employer’s Annual Federal Unemployment Tax Return.
- Both of these have to be filed by Jan. 31 of the following year.
- Check the previous quarter Forms 941 to ensure that you have correctly reported and charged the withholding tax.
- If any inconsistencies remain, make corrections for the fourth quarter Form 941.
Don't forget to check the requirements of your state as if it imposed a personal income tax since you are also required to submit forms of state payroll by the appropriate deadline.
3. Third-Party Sick Pay Reporting
Ensure that everything is reported to your payroll provider (yours truly, hopefully) if you’ve had any third-party payouts for disability payments.
Those amounts must be reported on tax returns and W-2 documents because timeliness and consistency are important.
4. Affordable Care Act Reporting Requirements
Earlier this year, we reviewed the history and basic requirements of the employer mandate under the Affordable Care Act (ACA). As a refresher, the employer mandate requires applicable large employers (ALEs) to offer coverage to their employees that are affordable and provides minimum value. An employer is considered an ALE when they have 50 or more full-time, including full-time equivalents, employed at their business.
The IRS has published its draft of 2019 Instructions for Forms 1094 and 1095 which will help you prepare for ACA reporting.
In fact, you will file Form 1094-C and Form 1095-C by Feb. 28 if you file on paper (or Mar. 31 if you report electronically) the following calendar year to which the return applies. For the 2019 fiscal year, when filing online, forms 1094-C and 1095-C must be filed by Feb. 28, 2020, or Mar. 31, 2020.
For forms filed in the 2020 reporting period given in the 2019 calendar year, when filing electronically, forms 1094-B and 1095-B must be completed by Feb. 28, 2020, or Mar. 31, 2020.
You can find the full instructions for Forms 1094-C and 1095-C here.
You can find the full instructions for Forms 1094-B and 1095-B here.
If you want help with compliance for next year, click here to learn more about our ACA Compliance Navigator.
Now is the perfect time to clean up all of the accounting-related procedures, so when year-end rolls around you're in a good place.
Be sure to run documents to clean up any inconsistencies of unpaid bills or open invoices. Also, remove accounts that are unused or closed and clear any deposited funds.
Beyond getting all straightened out in terms of accounting and documentation, while planning for the year-end, there are some other things to remember. Here are a few things in the miscellaneous category to also consider upon filing for year-end:
What's the point of waiting for New Year's? Your business goals should have the same attitude. Write them down and speak to the staff before the year ends!
Reports show that a single data hack could cost your small business anywhere from $82,200 to $256,000. If you aren’t constantly updating your passwords, you could be at risk. Take some time to go through and update all of your existing passwords. Make sure you record them in a safe place, like LastPass.
Your workers are your biggest asset and vital to the growth of your small business. If you haven't conducted routine performance reviews over the past few months, the year-end is a great time to interact so everyone knows where they are and what to expect. Learn more about employee performance reviews by clicking here.
Considering outsourcing payroll?
With 2020 quickly approaching, preparing and organizing will save you from a headache later.
PrimePay's All-Inclusive Payroll bundle increases business efficiency by pairing our payroll, tax, time tracking, and workers’ comp solutions.
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Editor's Note: This post was originally published in September 2017 and has been updated for freshness, accuracy, and comprehensiveness.
Disclaimer: Please note that this is not all inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding specific application of the information to your own plan.