year-end payroll issues presented by bronwyn betts
TRANSCRIPT
Year-End Payroll Issues
Presented by Bronwyn Betts
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Year-End Payroll IssuesNothin’ But Net!
Presentation ContentsYou’re in the Playoffs – Let’s Prepare to Win!
1 Bonus Payroll
Employer Health Contributions
Non-Monetary Fringes
FICA - Limits
Third Party Sick Pay
Social Security Numbers
Good Numbers to End the Year With
W2 Ordering, Printing, Electronic Submissions
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Bonus ChecksAll Good Players Deserve Incentives
1 Planning For Bonus Pay
• Are bonuses going to paid in checks or with direct deposits?
• When are we cutting these bonuses?
• Are the employees allowed to dictate federal & state?
• Should taxes be withheld at a flat % rate?
2 Payment Groups
3 Adjusting Taxes Withheld & Grossing Up Bonuses
Employer Health ContributionsInvesting In the Players’ Health Brings Great Contributions
1 Planning for Reporting of Health Contributions
• Is my company required to report Health Contributions on the W2?
• Have I been contributing with every payroll already?
• Where am I getting my information from and when will I get it?
• Have I gone live in FOUNDATION this calendar year?
2 W2 Box 12 Worksheet
3 Setting up Health Contributions for Next Year
By changing the Plan Type to “Section 125,” the “ER Contribution” tab becomes enabled.
This allows amount and descriptions to show on the employees’ check stubs.
This allows contributions to be reported on the W2. (Retroactive)
Identify the G/L accounts to expense and accrue this benefit.
Enter the amount per pay per employee. The amount you enter here can be overridden on each employee’s file.
When you enter the deductions for the EE, the “ER Contribution” tab will become available.
Enter health deductions and the amounts that EE deducts here.
Only right-click and “Add” if you need to overwrite the employer amount that was set on the “ER Contribution” tab on the miscellaneous deduction.
Non-Monetary FringesIntrinsic Value is Still Value
1 Planning for Reporting of Non-Monetary Fringes
• Does any employee receive a value that they need to be taxed on?
• Where will I get this information from?
• Can I get this before the year end?
• Is this something I do throughout the year next year?
2 Non-Monetary Fringes in Last Payroll(s) - Easiest Method
3 Non-Monetary Fringes After the Last Payroll for the Year is Complete – History Adj
FICA LimitsEvery Team Needs to Know Their Limits
1 FICA – Earnings up to $118,499.99
• Social Security = 6.2%
• Medicare = 1.45%
2 FICA – Earnings between $118.500.01 - $199,999.99
• Social Security = 0%
• Medicare = 1.45%
3 FICA – Earnings of $200,000 or more
• Social Security = 0%
• Medicare – 2.35% (1.45% + Additional .09%) Note: Employer still matches only 1.45%
Third Party Sick PaySometimes You Just Have to be put on the Injured Reserve List
1 Planning for Reporting of Third Party Sick Pay
• Who has to do the W2?
• Is the money that is paid to the employee taxable?
• Can I get this before the year end?
• Has this employee worked for you at all in the calendar year?
2 Set Up a Third Party Sick Pay Earn Code and Watch the “W2” Tab Setup
3 Two History Sets Adjustments
• First one to record the employer’s portion of taxes and taxability
• Second one to record the employee’s withholding for W2 purposes
Third Party Sick Pay History Adjustment StepsSometimes You Just Have to be put on the Injured Reserve List
1 Set up your earn code as TPS and mark the “W2” tab to show in the 941 Report
2 Enter History Adjustment #1
• Record the employer portion of FICA and taxable amounts only.
• Post in current year and do not enable the Bypass G/L checkbox.
• Make sure that you purge the timecards when done.
3 Enter History Adjustment #2
• Record the employee’s port of FICA already withheld by the employee
• Post in current year and do enable the Bypass G/L checkbox.
• Make sure that you purge the timecards when done.
Social Security NumbersYour Teams Numbers are Relevant
1 Payroll Control File – Determines if duplicates are allowed.
• Always set to “Prevent”
2 Check Social Security Numbers are valid when you hire!
• Filing mid-year with wrong SSN will require refiling
3 W2s Validate SSNs
• Certain numbers are not assigned by the government
• You can still print W2s with incorrect SSNs
Year-End ChecklistLooking at the Stats Makes Sense
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Actions we shouldn’t do
Don’t assume everything is correct if you’ve never checked things through out the year
Don’t change numbers just because they don’t look right
Don’t make P/R history adjustments for prior quarters unless you want to resubmit quarterly filings
Actions we should do
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Print the Earnings & Deductions for the entire year
Do the math and make sure that taxable amounts are correct
Make P/R history adjustments for last quarter with a post date of 12/31/15.
Rules For Good NumbersLooking at the Stats Makes Sense
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Pre-Tax Deduction Rules
Pre-tax health deductions (Section 125) are pre-tax for FICA, federal, state, and Ohio locals.
401K, IRA, SEP are pre-tax for federal, and most states (excluding CA and PA)
Watch for taxable union fringes and FICA limits
Standard Balancing
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Look at earnings and determine only taxable amounts
Taxable minus pretax deductions or limits
If something not matching, consider P/R history adjustments.
W2 Printing Steps
Order W2s1
Order forms from Dynamic
Systems. You can order from
other printers but you may need
to perform adjustments. Do this in
November at the latest.
Do a Test Run2
Practice W2 printing by doing a
test run ahead of time. W2s are
nothing more than reports and
they can be done multiple times.
Update FSI3
The W2 often changes year-to-
year. The formatting of the actual
form will take place in a
FOUNDATION update around
Christmas week.
Print Forms4
Print your forms by doing a
federal run first. You can usually
take care of all your needs. But if
you have employees that withheld
in 3+ state or locals, further runs
may be necessary
W2 Electronic Submission Steps
Register with IRS1
You must register with the IRS to
submit electronically. You will be
given a PIN number which is vital
to creating the electronic file in
FOUNDATION. Allow 6-8 weeks
for government to get you the
PIN.
Do a Test Run2
Practice W2 exporting by doing
ahead of time. W2s are nothing
more than reports and can be
done multiple times.
Update FSI3
The W2 often change year-to -
year. The formatting of the actual
electronic file will take place in a
FOUNDATION update around
Christmas week.
Run Electronic & Post4
Run the report, filling out all
pertinent fields. When you see
the report, click on the Post icon
on the toolbar and save the file to
an area you can retrieve. Log into
the IRS website and upload that
file.
