6 Payroll Tips to Wrap up the Year
December 21, 2022
As the end of the year approaches, it is crucial to ensure your payroll year-end information is accurate to help your business and employees prepare for tax season and year-end reporting. Even if you are an experienced pro, it can be easy to overlook items during the year-end crunch time. DM Payroll Solutions has outlined six tips to make your end-of-year payroll prep go smoothly.
1. Review Employee Personal Info
When it comes to payroll, the end of the year is a perfect time to check for inaccurate or outdated employee personal information. Take this time to audit your employee’s personal information such as full name, address, Social Security number and marital status for accuracy on W-2’s. This can help you avoid extra paperwork, reprinting of documents and penalties due to inaccurate data.
2. Prepare for ACA Reporting
Employers with an average of 50 or more full-time employees are subject to Affordable Care Act (ACA) tracking and reporting requirements. The deadline for ACA filing of all paper forms with the Internal Revenue Service (IRS) remains Feb. 28, 2023, or March 31, 2023, if filing electronically. Attention to detail with all forms and requirements is critical, as any inaccuracies or delays in submission can result in penalties and interest.
Audit your records to determine if you need to make any adjustments for third-party sick pay, non-cash fringe benefits, excess group life insurance, bonuses and other important income adjustments.
4. Retirement Contributions
Take a look at which employees have contributed to their retirement account and if they have contributed their desired amounts, up to the annual plan limits. This is also a good time to send out a communication regarding the plan limits for 2023. The amount individuals can contribute to their 401(k) plans in 2023 has been increased to $22,500, a $2000 increase from 2022.
5. Determine Your 2023 Payroll Policies
This time of year is always a good time to revisit your payroll policies and ensure they match up with the demands of your employees. Determine the paycheck deposit schedule you plan to use, as well as what options you will have for employees to receive their paychecks.
6. Process Final Payroll and Run Reports
After running your final payroll of 2022, it’s a good time to compare and verify your year-to-date totals for employees’ earnings, taxes and personal information.
DM Payroll Solutions is here to help with all your payroll needs. Our system provides you with the data you need to ensure accuracy on year-end reporting of ACA forms, W2s and tax filings. Learn more about our service offerings by contacting us today.