Although year end for most is embellished with holiday spirit, singing, mistletoe, and family, Payroll & HR professionals also have the added “cheer” of closing out the year and getting all their important employment compensation information recorded. With the coronavirus, masses of employees working from home, as well as the impending IRS deadlines, it is more important than ever to get these tasks completed as early as you possibly can.
Some Important Items to consider going into year-end:
- Update employee addresses (no later than 12/31)
- Verify YTD Limits (Taxes, Retirement, Medical, etc)
- Record Manual Checks, Voids, or Bonuses paid after your last scheduled payroll run for the year. These will require a supplemental payroll dated for 2020
- Quantify ‘S’ Corporation Officers’ Medical Premiums
- Review Group Term Life Policies for employer provided life insurance in excess of $50,000
- Collect reports of personal use of company provided vehicles [Accounting for Auto Usage]
- Calculate reportable qualifying employee gifts or awards
- Report any Employer contributions to a non-qualified deferred compensation or retirement plan
- Consider any other taxable fringe benefits (Employer HSA Contributions for W2 Disclosure and CA Tax Reporting, Health Club Memberships, Unsubstantiated Cash Payments, etc)
- Look for any employer paid moving expenses for relocated employees
- Consolidate Allocated Tip Calculations
- Contact your Sick or Disability Administrator for any third-party Sick Pay
If you are unable to quantify any of these items before December 31st, please let us know ASAP. Any 2020 payrolls run after the December 31st deadline will result in late tax deposit payments as well as re-filing fees.
IRS Employer’s Tax Guide To Fringe Benefits: https://www.irs.gov/pub/irs-pdf/p15b.pdf
Disclaimer: These materials are provided for informational purposes only and are not intended as legal or tax advice. Readers of the Innovative Blog should contact their legal or tax professionals to discuss how these matters relate to their individual circumstances.