The Payroll Blog

News, tips, and advice for small business owners

Year-End Checklist for Accountants

Posted On
12/16/2019
By
Anne Perisho

Accountants, the new year is upon us, and if you’re like us at SurePayroll, you’re likely scrambling to make sure your clients are where they need to be to start the new year off on the right foot. To make things easier for you, we’ve compiled a list of last-minute reminders to guide you through the year-end process with your clients.

S-Corp 2% Health Insurance

As you likely know, in most cases, employee health insurance is a non-taxable fringe benefit. However, if your client’s business is an S-Corporation and they own more than 2% of the company’s stock, the health insurance benefit works a bit differently. An S-Corp can provide health insurance to non-owner employees as a tax-free fringe benefit. However, if the company provides health insurance to employees, owners or shareholders that own more than 2% of stock in the S-Corp, the cost they pay for their health insurance is subject to income tax.

Therefore, your client needs to include the amount of the S-Corp shareholder health insurance premium in those employees’ taxable wages. If they haven’t done so yet, it’s important that this information is recorded in their payroll account by year-end. This amount will then be displayed in box 14 of the employees W-2. More year-end S-Corp 2% Health Insurance information can be found on the IRS website.

W-2/1099 Changes

Before year-end, it’s critically important that you and your clients review their employees’ and 1099 contractors’ information and make any needed corrections or updates prior to running the last payroll of the year. While most items are unlikely to change over the course of the year, something as simple as an employee address change could really throw a wrench in things.

Some information you should check includes:

  • Missing or inaccurate employer information: This includes company name and address, federal identification number, and state identification numbers.
  • Missing or inaccurate employee information: Including employee name, social security number, updated marital status, and employee address.
  • Employee wage and tax information: Including employee earnings, deductions, and taxes.

Collect and Submit Updated SUI Rates

As you know, State Unemployment Insurance (SUI) is an employer-funded tax that gives short-term benefits to those who lost or left their jobs for a variety of reasons. The amount of SUI a company pays is proportional to the SUI rates they are eligible for. This rate changes depending on the amount of money an employer pays their employees as well as the number of employees laid off. As these rates change from year to year, it’s important to collect the new rate from your client so that it can be applied to the client’s payroll account prior to the new year. States generally distribute letters notifying employers of their new rate by the end of November.

Beware of Federal Reserve Closures

Nothing ruins a holiday like a late paycheck. If your client’s normal processing day falls on a bank holiday, it could mean that their employees might not get paid on time. Reminding your clients to process payroll a day or two earlier could make the difference between smooth sailing for everyone and an angry phone call on Christmas morning. It’s also important to remind your clients that their final payroll of the year should be processed well in advance. The final day of the year to process payroll is December 27th. This date will also apply to any extra payrolls, such as bonuses or holiday pay.  

Bottom Line

Year-end can get hectic quickly, which is why having a variety of to-do lists and checklists can be helpful. With these tips, you can work with clients to ensure they are ready to kick off the new year. If you’re already a part of the SurePayroll Reseller Program, you already have access to checklists and other helpful guides that will walk you through year-end tasks using our product. Not part of our Reseller Program yet? Year-end is a great time to make a switch to our platform, so you can also start the year with your best foot forward.