It’s that time of year again! Time for family and friends…time for winter sports and play…time to do W-2’s, 1099’s, and prep for taxes. Is it really that time again? Is your business prepared? Here are some reminders of things that need to be taken care of before year end (or at least before your bookkeeper processes payroll reports in January).
Now is the time to make sure that you have correct information for all of your employees. Has their name changed, their address changed, is their Social Security number correct in your payroll system? In fact, it wouldn’t be a bad idea to have them complete a new W-4 for 2018. You can easily find a pdf copy at https://www.irs.gov/pub/irs-pdf/fw4.pdf, or have your bookkeeper provide you with a copy. And don’t forget to send your bookkeeper any updated mailing information you may have for past employees. W-2’s have a deadline for completion and filing by January 31st.
It is also time to make sure that you have the information needed from your vendors that provide you with services (labor), or that you pay rent to. You are required to have the correct name, mailing address, and tax ID number for filing 1099-MISC forms. You can request the information directly from the vendor, or have them complete a W-9 form (https://www.irs.gov/pub/irs-pdf/fw9.pdf). Your bookkeeper can provide you with a form if needed, but it is very important to give your bookkeeper this information for filing these forms with the IRS. 1099-MISC forms also have a deadline for completion and filing by January 31st.
And we all hate getting letters from State payroll departments. What do they want now? Did an employee file for unemployment? Did a tax payment get missed? Is this just JUNK MAIL? However, there is are certain letters you will receive that is very important to your payroll provider.
In Oregon, you will receive a letter from the Oregon Employment Department in November or early December of each year to notify you of the new Unemployment Insurance Tax rate for the following year. And this rate can easily change each new year, depending on what rates are set by the state and/or whether you have had any claims in the past year. If the rate isn’t corrected in the payroll software before year end, that could lead to overpayment or underpayment of taxes. No one wants to pay more taxes than is owed. And underpayments always have penalties and interest applied!
And the same applies to Washington State employers. You will receive letters updating both the Washington Employment Security rate and the Washington L&I rates. Again, if the rates aren’t corrected in the payroll software before year end, that could lead to overpayment or underpayment of taxes. No one wants that!
So, remember to send this information and copies of the payroll letters as soon as you receive them. The most secure way to get your bookkeeper W-4’s and W-9’s is by mailing, faxing, or dropping off at our office. For the letters you can email a copy, fax a copy, mail or drop off the originals. Just make sure we receive this information so that we can be completely up to date with filing information and tax rates for 2018. And if you haven’t received a letter from your state, please contact us and let us know so that we can contact the state to see if there are changes.
With your help, we can keep all your vendor and payroll records up to date! THANKS!