Preparing Your Year End Payroll Taxes
The new year is upon us and with it the need for Individuals and Businesses to prepare Year-end Payroll Taxes. So what forms do you need and do you need help.
There are two main types of year-end payroll forms we are going to discuss, W2s and 1099s. Both of these forms are due January 31st
W2 forms are filed for individuals you employed and paid during the 2017 tax year. If you are not sure the individuals you paid during the year were employees or independent contractors. Take a look at this page from the IRS website detailing the differences.
Once you are sure, the individuals are properly classified as employees. You will want to verify each employees details (SSN, Legal Name, and Current Address). Beyond that, I would also make sure you have a current and up-to-date email address for your employees as well.
Next, if you offer sick and vacation days verify that all vacation and sick days have been properly recorded and paid out.
Following that, pull together or run a report of all the amounts you have paid the employees including non-payroll items (You can exclude reimbursements). Review the non-payroll items for fringe benefits which will need to be included in on the W2. You can find a list of what the IRS considers fringe benefits in Publication 15-B.
Now that you have collected and verified your information you can now work on preparing your W2s and accompanying forms (940 and 941). You can still file W2s and other forms by paper, and you can find copies for purchase from Staples and Intuit, but I recommend e-file the forms through an e-file vendor like Track1099 or Tax1099.com.
E-filing helps to reduce the time and cost, and also provides you with the option of offering the W2 documents electronically saving on postage.
For 1099-MISC in general if you pay an individuals or vendors $600 or more for the 2017 tax year you required to file. You can see more details on who you must file for and what the exemptions are at the IRS website.
1099-MISCs are easier to file then W2s in most cases. Of course, the first step is to verify you have a current and correct W9 for each individual and vendor and to verify they are correctly classified as an independent contractor.
Step two is to run a report for all payments to the independent contractors excluding reimbursements.
Step three is to fill out the forms and file. As with the W2s you can paper file 1099-MISC (and the accompanying 1096) and can purchase those forms from Staples or Intuit, but again I recommend e-filing through an e-file vendor like Track1099 or Tax1099.com.
Not only does January bring a new year but along with it the annoyance of filing taxes. If you are worried about filing your payroll tax forms or need help filing them. Feel free to reach out to us. We would love to help you through this season. Also check us out on Facebook, Twitter, and LinkedIn for updates and more articles like this.