It’s almost time for the new year! Of course, so long as we are confined by the constraints of the passage of time taking place in a linear fashion, this means it is also time for the end of the year. That means ensuring payroll information is up to date, reviewing employee information like social security numbers and addresses, checking out deadlines, and so much more that almost certainly has you jumping out of your chair with excitement. But for the very, very few of you who are not-so-excited for this time of the year and all of the fun stuff we just mentioned, it might feel overwhelming to think about all of the things you need to do to ensure your business is ready for the end of the year.
At Payday HCM, we know how confusing and stressful this time of year can be. We’ve had plenty of potential clients come to us with questions about what they need to know before the end of the year and what they need to have ready in order to finish out the year successfully. As a payroll provider, we’re also the ones to handle these end-of-the-year preparations for our clients, and we’ve seen firsthand just how complicated these things can get. Of course, it doesn’t have to be, though.
In this article, we’ll go over everything you need to know heading into the end of the year. We’ll go over the important deadlines, forms, fillings, and all other various components that make up the end-of-the-year payroll. By the end of this article, you’ll be much more informed about the things you’ll need to have ready coming into the end of the year so that your business can enter the new year with confidence.
In this article, you will learn:
What To Know About Year-End
Firstly, we’ll start with a general overview of what we mean when discussing year-end and what you need to know heading into it.
Payroll and Taxes
When we talk about the end of the year and what businesses need to know ahead of it, we’re mainly talking about two things: payroll and taxes. Payroll because all 2024 payroll needs to be processed before any 2025 payrolls can be processed, and taxes because all 2024 payroll information needs to be processed in order for tax information to be accurate.
Ensuring your information is accurate and up-to-date is especially important when using a payroll provider. Not only does having up-to-date information ensure timely filing of any final payrolls and distribution of tax forms, but it can also help prevent you from incurring any fees that may come with last-minute changes to information.
Important Information To Have Going Into Year-End
When looking at year-end, there are a few key pieces of information that you’ll need to ensure you have to submit. These include any payroll adjustments, bonuses and special payrolls, fringe benefit adjustments, and third-party sick pay information.
When looking at any payroll adjustments, you’ll want to get started on submitting those sooner rather than later. Your last-dated payroll for the year will still obey the typical payroll rules: you’ll want to submit your payroll two banking days ahead of the actual check date. This is to allow processing time and ensure employees’ direct deposit processes on the check date.
Payroll adjustments may also have their own deadline as outlined by your payroll provider. For our partner isolved, for example, the deadline is January 6th.
When working with a payroll provider, it’s important to let them know about any bonuses and special payrolls that you’ll have toward the end of the year. You’ll want to make sure that these have a 2024 check date so that they can be included in the tax forms for 2024.
Any fringe benefits—group life insurance, auto allowances, spending accounts—need to be identified before the end of the year. Since many of these benefits require tax withholding, they need to be reported as live wages. Alongside this, they’ll need to be processed with the last payroll prior to the end of the year.
Actions To Take Before Year-End
Once you’ve got all the information you need compiled, you’ll want to take a look at some important things to do to ensure the end of the year goes over smoothly.
Ensure All Information Is Accurate And Up-To-Date
The biggest and perhaps most important thing you’ll want to do at the end of the year is ensure that you and your employees’ information is accurate and current. For employees, you’ll want to ensure that mailing addresses, names, and social security numbers are all accurate. Doing this ahead of any deadlines can save you any fees for reprinting W-2s.
Within isolved, you have access to different tools to ensure that your employees’ information is accurate, including generating an Employee W-2 Verification Report.
For your business, you’ll also want to make sure your mailing address for W-2s is accurate. You’ll want to confirm your state and federal employer identification number. You’ll also want to make sure your state unemployment account number is accurate.
Affordable Care Act Filing
If your business averaged at least 50 full-time employees during the prior calendar year, that makes you an applicable large employer. Therefore, you must file information in compliance with the Affordable Care Act so that the IRS can verify you are offering your employees minimal essential coverage that is “affordable” and provides “minimum value.”
It is very important to determine this earlier in the year rather than later. This is so you can gather data to determine your offers of coverage and affordability. When it actually comes time to file, you’ll be submitting 1095 forms for each full-time employee.
Important Year-End Deadlines
Of course, with the end of the year comes a whole lot of deadlines. Keeping track of them can mean the difference between stress-free filing and paying late fees.
Federal Deadlines
The IRS has outlined its deadlines for important year-end filings. These include:
- January 31: Employees must receive W-2 forms by this date.
- January 31: File W-2 forms with the Social Security Administration.
- January 31: Provide independent contractors with a 1099-NEC or 1099-MISC form by this date.
- January 31: File form 940 (federal unemployment tax return).
- January 31: File 941 or 944.
- January 31: File 1099-NEC.
- February 28: File paper 1099-MISC forms.
- March 31: File electronic 1099-MISC forms.
- March 31: File ACA forms electronically.
In most cases, businesses must have their taxes filed by April 15. There are a few exceptions, however, depending on your business type. The IRS also has information to help you determine what you must file, depending on your business type.
Payroll Provider Deadlines
If you work with a payroll provider, they may have specific deadlines so that they can file your information on time. isolved, for example, has a series of deadlines for its partners. These include:
- December 27: Last day for regular two-day processing of payroll
- January 6: Last day to process payroll adjustments
- January 6 through February 28: Blackout period.
Not following or missing these deadlines your provider sets may result in fees.
Ending The Stress Of Year-End
To say the end of the year can be a stressful time probably doesn’t emphasize just how stressful the end of the year can really be. For businesses big and small, it can be extraordinarily time-consuming to verify every employee’s information, file all of these different tax forms, and ensure all deadlines are being met. Not only that, but you also have to deal with everyone constantly reminding you of that video someone took of you at the company holiday party (it really wasn’t that funny).
Of course, it doesn’t have to be this way. With the information provided in this article, you’ll be able to face the new year in stride. It also doesn’t hurt to ask for help, though. Learn more about Payday HCM’s services and how we can help your company breeze into the new year.
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