New Year’s Payroll Checklist: Things to Remember
December 30, 2020
By Greenshades Software

By Erica Kasper
Content Marketing Manager

 

At last, we’ve reached the end of 2020. While that’s a relief in a lot of ways, this time of year also brings extra tasks for payroll and HR professionals. Before we launch ourselves with hope and enthusiasm into 2021, don’t forget to make your OWN list and check it twice. Or you can just use ours!

Make sure you know the deadlines: Confirm that you know when employees, contractors and government agencies are required to have copies of documents like 1099s, W-2s, etc. Employees and contractors, for example, must have all their documents in hand by January 31. Since January 31 is a Sunday in 2021, the deadline is February 1. This is also a good time to have a plan in place for distributing and filing your documents; do your workers opt for electronic distribution of their 1099s and W-2s? If they prefer paper, do you plan to print and mail in-house, or will you use a third-party service? Planning now will save you major headaches later.

Check your employee and contractor data, including contact information, wages and benefits: This is the time to ensure that your reporting throughout the year has been accurate and up to date. Are all wages accounted for? Are benefits recorded properly? While you’re at it, make sure you have updated names, addresses, and Social Security numbers for everyone you pay. If someone changed their name during the year or moved to a new location, now is the time to ensure that your records are updated.

Check your business’s information: While you’re checking on your employees and other workers, you should also be updated your company information. Is the business’s legal name and address correct? Is the Employer Identification Number (EIN) correct? Has the company structure changed in the past year? Will it be changing next year? Be sure you have the latest updates in your system.

Confirm your tax rates and deposit frequency for the new year: You might have received a letter from a state or local government agency notifying you of a new tax rate, so you need to make sure your system has that updated tax rate in place for January 1 onward. You should also check your lookback period for IRS withholding and see that you have the right deposit frequency for federal income, Social Security and Medicare taxes for 2021. If you file Form 941 (Employer’s Quarterly Federal Tax Return), your lookback period is July 1, 2019, to June 30, 2020. Your deposit schedule depends on your tax liability during the lookback period, so be sure you have the most updated information to avoid penalties and missed deadlines. Don’t let this time of year bring frustration and stress. Staying organized can keep your year-end process smooth and streamlined. If you need a little extra help, or if you want to take your payroll and HR software to the next level for 2021, contact us at sales@greenshades.com to request a demo and see how Greenshades can take the headache out of HR and payroll for you!