The year will be wrapping up soon and your business needs to submit the information we require to complete your documents.
With that in mind, we’re providing you with a list of important information. Some or all of the following items may apply to your business.
Company Level Changes
Company address. Make sure your company address is correct. We prepare all W-2s and annual filings with your legally registered address. Any changes must be registered with all government agencies. Please visit irs.gov and any applicable state agencies to obtain instructions.
When you initially registered with the IRS, you may have used your home address. If that address hasn’t been updated, it will appear on W–2s and tax returns.
Contact information. Review payroll and ownership contact information to make sure they’re up to date in our system. Also, we may have received authorization from you to allow CPA and/or bookkeeping access to obtain online reporting on your behalf. Please notify us of any changes regarding these authorizations.
Policy changes. Alterations to company policies that will affect 2016 payrolls should be submitted as soon as possible. This will give our team time to set up and test the changes. Submissions may include but aren’t limited to:
- Pay frequencies,
- Insurance rate changes,
- Time off policies, and
- 401k plan changes.
Employee Level Changes
W-2s Forms. Verify employee names, addresses and Social Security Numbers (SSN). Correct addresses allow accurate delivery of W-2 statements.
In addition, employees must have correct SSNs listed on their W-2s and reported to state agencies for unemployment purposes. Missing or invalid numbers are subject to penalties.
Deferred comp/retirement plan. Do you have employees who contribute to a deferred compensation plan by payroll deduction? They will have the “Retirement Plan” box marked on their W-2s automatically.
If your business has a qualified pension plan that doesn’t run through payroll, the “Retirement Plan” box should be marked for any individual for whom you’ve made contributions. This isn’t automated.
Let us know what applies in these circumstances.
Manual checks. Submit all relevant payments that were issued to employees that haven’t been included with previous payrolls.
Miscellaneous. Other changes to submit to us may include new earnings codes, voided checks and new deductions.
S Corporation 2% shareholders health insurance. The cost of premiums provided to 2% shareholders must be reported as income on the W-2s. This amount isn’t subject to Social Security or Medicare taxes.
Group term life. If you provide this insurance to employees, all premium amounts exceeding $50,000 are subject to withholding tax.
Third Party Sick Pay
Third party sick pay benefits must be included on W-2s, as well as be reported to the IRS and Social Security Administration (SSA) during the same year that the employee received the disbursement.
Your disability vendor will send you year-to-date notices of disbursements as they occur, as well as an annual reconciliation of benefits after the year-end. It’s important that you provide us with records of these payments as they are made, rather than relying on the annual reconciliation. This allows us to record the payments with payroll, and fulfill the reporting requirements to the IRS and SSA.
Fringe Benefit Adjustments
Personal use of company car. If you provide employees with company vehicles, the personal use of that vehicle is taxable.
Dependent care. As much as $5,000 contributed by an employee to a flexible spending account for child and dependent care expenses is excluded from taxable income, provided both spouses work.
Gifts. The value of gifts to employees in the form of such tangible good or services as real estate rentals, gift cards, televisions or electronic tablets is taxable and subject to withholding taxes.
If you’re planning to run an extra bonus payroll, please advise us ASAP. We need the date you will run this payroll in order to update your 2015 payroll calendar. Payroll processing for the year must be completed before December 31.
Did You Know?
If you issue 250 or more W-2s, you must report the aggregate cost of employer-sponsored health coverage. (This amount is for medical insurance only. Supplemental health, dental and vision don‘t have to be included.)
Reporting the cost of health care coverage on W-2s doesn’t mean it is taxable. The reporting is only designed to provide employees with information on the cost of their coverage. In order to process W-2s for you, we need these amounts.