As the year draws to its end, small businesses face the annual challenge of closing their books and getting ready for tax season. With several crucial deadlines and compliance requirements, year-end payroll can often be overwhelming.
But it doesn't have to be. In this blog post, we will walk through the key items to address as you wrap up the year and look ahead to 2024. For a more detailed guide, check out Workforce PayHub’s Year-End Guide.
Start by marking your calendar with these essential dates:
Accuracy in final payroll totals is non-negotiable. Your business needs to update manual checks, adjustments for third-party sick payments, and contributions to benefits and retirement savings by the last scheduled payroll. The trick is to prioritize these updates before December 27 to avoid discrepancies that could ripple into the new fiscal year.
The year-end isn't just about closing out; it's also about rewards and recognition. If you're giving out bonuses, tax implications and deadlines for wire transfers for significant amounts should be flagged for action. Remember, the IRS waits for no one, and tax liability from bonuses over $100,000 demands next-day payment.
For Applicable Large Employers (ALEs), the Affordable Care Act mandates precise reporting of health insurance information. The data shuffle doesn't end there. Third-party sick pay also plays a pivotal role in your year-end reporting. A delay in receiving this information can slow down the whole show.
Taxable fringe benefits, like the personal use of company cars, group-term life insurance over $50,000, and other non-cash benefits, must be recorded meticulously. These are not just perks but critical payroll components that must be accounted for with precision. Check out our blog post "Understanding Taxable Fringe Benefits" for a breakdown of which benefits are taxable and their payroll implications.
S-Corporation shareholders have unique considerations when it comes to health and accident insurance premiums. Depending on the plan's discrimination status, premiums could have different tax implications. Proper reporting is vital to stay on the right side of compliance.
Here's what you need to tick off your list:
At Workforce PayHub, we acknowledge that managing year-end payroll is complex and challenging. That's why we offer our expertise and resources to ensure your business sails smoothly into the new year. We are here to support and guide you through every step of the year-end payroll process.
As the year comes to a close, remember that it's not just about wrapping up but setting the stage for the next year of success. Ensure you address the year-end payroll with the seriousness it deserves. For more details and to dive deeper into the specifics of year-end payroll management, check out Workforce PayHub's Year-End Guide.
Your future self will thank you for taking the time now to get ahead of the game. Contact Workforce PayHub today for a smoother year-end payroll process.