Year-end: It’s the most wonderful time of the year

Daylight savings time recently ended signaling the end of 2021 is drawing near. November and December are the months to prepare for the various information return deadlines in January, including 1099s and W-2s.

Get proactive

Most 1099s and all W-2s are due to recipients by the end of January which makes for a very busy first month of the year. Here are several actions you can take now to prepare for the upcoming deadlines:

Overall

• Take a refresher course – AGHUniversity.com has various free year-end webinars pertaining to 1099s, fringe benefits and payroll year-end.
• Review last year’s files as well as your documented processes.
• Research and document the various reporting deadlines (reporting to vendors, employees, the IRS and Social Security Administration).
• Review your accounting/payroll systems to gain an understanding of available information and necessary reports.
• Gather and read the IRS instructions for the various forms.
• Purchase the necessary forms.
• Test any year-end system updates.

1099s

• Make sure you have Form W-9, Request for Taxpayer Identification Number, for all vendors.
• Run a preliminary vendor payment report to determine if you have all vendors properly set up in your system.

W-2s

• Identify your last payroll processing dates for the year and the first processing date of the new year.
• Look for any additional payments made to employees through your accounts payable system.
• Identify and value all taxable fringe benefits provided.
• Get prepared to reconcile your annual wages, deductions and taxable wages.

Don’t just survive this year; thrive next year

Ensure you have processes in place to capture any process improvements or hiccups you encounter during this year’s year-end processing. It’s easy to lose those ah-ha ideas and improvements in the whirlwind of getting forms submitted. Ensure you and your team have a way to capture those ideas, problems, etc. quickly and can easily review them once things quiet down.

In summary

Year-end can be a busy time of year, but it doesn’t have to be hectic. With the right people, processes, and tools in place, you can get through it with minimal stress. If you would like to discuss your year-end processes, contact Cindy McSwain to see how if they can improve.