Journey’s Year-End Guided Checklist
Tis the season where the end of the year approaches and the new year start nears. It’s important to make sure that your payroll information is up to date and accurate. Use Journey’s helpful guide as you finalize 2022’s payroll data and start setting up your 2023 compensation and benefits, to help keep you on track.
No matter your level of expertise, it can be easy to overlook two very important items.
The last payroll for calendar year 2022, and the first payroll for calendar year 2023. Journey’s YE Checklist can help keep you organized to ensure you don’t overlook an important piece of information or any requirements regarding payroll or benefits.
Businesses are responsible for year-end payroll tasks related to employee payments and records, which as a Journey client, you have a trusted provider to help you with these crucial pieces. Us 😊
What forms as a Journey client, are taken care of for you?
We’re glad you asked! Employers are required to send employee and contractors alike, tax forms no later than January 31st, as well as submit them to the IRS and SSA. Those year-end forms include:
- Form W2: Reports employee wages and withholding
- Form W3: Summarizes the information on the W2’s
- Form 1099 -NEC: A statement of income for contract workers
- Form 940: Filed with the IRS by businesses with one or more employees and used to determine the employer’s federal unemployment tax.
- Form 941: Filed quarterly and used to report wage withholding for income taxes as well as the employees’ share of Social Security and Medicare taxes as well as the employers share of FICA.
- Form 944: Applies to employers with annual tax liability who withhold federal income tax, FICA (employee + employer share) totaling $1,000 or less.
Preparing yourself for the last payroll of the calendar year 2022.
Getting ready for the end of the year payroll, can be stressful. We’re here to help! Here are some helpful tools and tips, to prepare you for the end of the year.
Check Business Information.
Right now, is a great time to verify and check all your business information, such as your EIN, State numbers, address, and company name. For tax purposes, it’s important that this information matches what is registered for your company.
Determine and Update Compensation for 2023:
One of the biggest ways to set yourself ahead when it comes to budgeting, is to consider any pay raises you may have coming for the new year. Taking into consideration what you can afford as the business, as well as costs associated with payroll taxes to accommodate the raises, this is a good time to start thinking about those changes.
Year-End Bonuses
This time of year, is one of the most common times for bonus payrolls, which leads to the question, if bonuses are tax deductible, when do you deduct them? For calendar-year bonus reporting, there are two things to keep in mind. Cash-basis business vs accrual basis business.
Cash base business: deduct the bonuses in the year in which they are paid out to the employee. If you pay the 2022 bonus in 2022, then they are deductible for 2022. If you pay the 2022 bonus in 2023, then they are deductible in 2023.
Accrual base business: This would be a bonus that is declared and accrued before the end of the year. They are then deductible this year if they are paid within 2.5 months after the close of the year.
Unused Benefits for 2022
There could be benefits that employees have either earned or paid for in 2022 that may expire at the end of the year. Now is a great time to check over your company policies and inform employees of what they have or need to use. Some of those benefits may have carry over and some have limits. Things to consider: Vacation days, Sick days, Personal leave days, etc.
Employee’s and Employee Information
End of year is a great time to go through your employee list, check to make sure you don’t have terminated employees in your active employee list, and to make sure your data is up to date. It’s also a great time to remind employees to update their information if they have moved, have W4 changes or need to make tax changes. Journey’s system makes it easy to accomplish this for both you and your employees. Reach out to your payroll specialist if you need any help at all!
Special Circumstances
It happens, you hire someone that forget to complete their W4 or their proper identification. This is a great time to make sure you have your information complete.
It’s also a great time to make sure if any checks were voided or issued outside of payroll, that information is turned in immediately so that we can make sure to process it before year-end for it to be counted.
You’ve finalized the last payroll of 2022, now what?
Now is the time to get your ducks in a row for the new year start. Below are some important things to do once that final payroll has been run.
Employee wage, tax, and benefits
Before you jump in and process that first of the new year payroll, make sure you have reviewed each employee’s wage, any benefits deductions or information necessary to make sure that first payroll goes off without a hitch.
W2 Forms to all Employees
Make sure to distribute the W2’s that Journey processes for your company, to all employees before the deadline of January 31st. The best part about this, each employee gets a copy of this in their HUB account and mailed directly to them. We do the heavy lifting for you, just make sure you’re watching for any that get returned to you because of an invalid address.