With the federal government looking for ways to balance its budget, you can expect the IRS to crack down on payroll compliance violations to fuel their revenue growth. Since December is right around the corner, now is the time to prepare your business for year-end payroll compliance and protect your organization from any IRS fines. Below are the six areas that you need to address to verify that your company is prepared.
This is the area from where the IRS will try to squeeze the most fines out of, because minor clerical errors are fineable compliance violations and they are easy to point out by detail-oriented IRS agents.
Verifying employee data should include the following steps:
Triple check with your accounting department to verify that all of the following data is included correctly:
Make sure that all of the following benefit data is correctly recorded:
Part of year-end payroll compliance is making sure that you have all of the tools that you need to follow all relevant procedures. Ensure that you have the following resources ready for use before the last payroll of the year, or employ a service that can handle them for you:
Both state and federal tax laws are constantly changing; it is very likely that this year's tax laws are different from last year's. Double check for any recent updates in tax laws to see if you need to do anything different from last year in order to remain compliant. For example, review the latest release on the FUTA Tax Credit Reduction. In addition, look ahead to 2014 for the new regulations that begin January 1. Plan and prepare for any changes required to comply.
Federal law requires that employers with 250 or more W-2 tax forms in the previous year report the full cost of health insurance on the W-2. If you had fewer than 250 W-2's in 2012, then you are exempt from this requirement in 2013. If you outsource your payroll, the provider should be able to assist you with this. You will, however, need to provide them with the correct information for all employees.
To learn more about how to prepare your company for year-end payroll compliance, contact us at PAYDAY Workforce Solutions today. We can be reached via phone at (714) 467-3434 or via our website at www.paydayonesource.com.
PAYDAY Workforce Solutions provides a single database SAAS solution for Human Capital Management (HCM) including payroll, human resources, time management, benefits administration and onboarding to companies of all sizes and in various industries.
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Orange, CA 92868