Year-End Payroll Checklist for Small Businesses

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As this year draws to a close, it’s time to complete year-end closing payroll requirements. The following checklist will help you to complete this requirement and prepare you for payroll setup in the new year:

Before Year’s End:

Mark Rowley, Owner
RandR Payroll Services

  1. Confirm Accuracy of Employee Information

Before you generate W-2 forms in the new year, you want to make sure you have the current and correct information, including full legal name, current address, contact information, and social security number.

  1. Verify Paychecks Recorded

All payments need to be recorded for employees in the current year, so that you can generate accurate tax information.

  1. Confirm Employee Compensation

Wages, deductions, and benefits need to be confirmed accurate in your payroll system.

  1. Paid Time Off Balances

Any PTO needs to be reviewed to verify how much remains. Follow company policies and the laws of your state.

  1. Order Forms

Blank W-2 and W-3 forms should be purchased from the IRS. You’ll need these to prepare employee tax records for distribution.

  1. Get Updated Labor Law Posters

Order new posters for your company’s needs. Follow federal and state law, posting what is required for employee reference.

  1. Confirm Tax Rates

Tax rates and wage bases can and do change from year to year. Check to make certain the rates you’re using are correct for federal, state, and local taxes.

  1. Employee Check of Withholding Allowances

Ask employees to confirm their allowances are being correctly withheld from each paycheck.

  1. Decide New Year’s Deposit Schedule

Based on a lookback period, taxes must be paid monthly or semi-weekly. Review and confirm your deposit schedule in the new year.

After New Year Begins:

  1. Do Payroll Updates

Any employee changes to withholding or deductions should be input to your payroll system. Also, confirm and adjust for any tax rate changes.

  1. Distribute W-2’s

Send completed W2’s to employees before January 31.

  1. File W-2 and W-3 forms

Remember to send these forms to the Social Security Administration before January 31.

  1. Report Taxes and Make Deposit

Deposit and file FUTA, FICA, and federal income taxes for the previous year by January 31.

Have questions about year-end closing? Call us here at R&R Payroll & Bookkeeping Services for a consultation with a pro: (951) 296-0412.