Payroll Year-End Practices and Procedures Checklist
Author: Alice Gilman
At the end of every year, employers must file accurate and complete Forms W-2 and W-3 with the Social Security Administration (SSA). And, at the beginning of the following year, they must provide copies of Forms W-2 to employees. The information and wage and tax amounts employers report on Form W-2, Form W-3 and the four quarterly Forms 941 that are filed with the Internal Revenue Service (IRS) should match exactly. Employers also must provide copies of Forms 1099-MISC to independent contractors who have been paid at least $600 in cash for services rendered to the employer; the employer must also file copies with the IRS.
Preparing for year-end is actually a year-long process; the process does not start in January and end in March. By taking a long-view approach to year-end, employers will find that preparing Forms W-2 and 1099-MISC will not be overwhelming and time consuming.