Now is the time to check your records to make sure your ID numbers, names, and addresses are correct. Remember when it comes to 1099′s your vendors should have provided you with a W9 form listing their correct business name, address and the ID number that is associated with their business name. These forms are available at IRS.gov. Incorrect ID numbers or ID numbers not associated with a correct name – a business owner may provide their Social Security Number but put their business name on the W9. A SSN needs to be associated with the person’s personal name that is assigned that number. An EIN (employer identification number) needs to be associated with the company name assigned to that number. If the IRS can not match the identifying number with the proper name you will receive a letter from them requiring you to verify and obtain the correct information. And you may be required to deduct and remit to the IRS backup withholdings from every check you issue to the problem business in the future. You also may be accessed a penalty for every incorrect 1099 or W2 you issue.
The deadlines for W2′s and 1099′s are as follows:
To the business or individual Mailed no later than January 31st following the close of the calendar year.
To the Social Security Administration Mailed no later than February 28th following the close of the calendar year
This is also the time you may want to investigate the convenience of using a payroll service. Then next year at least the W2 part of this fun exercise will be done by someone other than you. There are many good choices available and some will download into your existing software. Questions you should ask are what are the minimum amount of employees they will process, what deductions will they track beyond the standard payroll taxes (401k, health insurance, vacation and sick time, etc), what will their reports be like, can you enter your payroll data electronically or do you need to phone it in, do they do direct deposit and whether they can electronically link with your accounting software program. There are also several good online payroll services where you log in to your account, enter your employees’ hours and then authorize the payroll to be paid. Some of these services will also take care of your federal & state deposits and filing requirements. And guarantee that if any penalties are assessed for either late payments of deposits or late payroll tax return filings (as long as the funds are available in your checking account for them to draw on at the needed time) they will assume the responsibility and expense. Can not be any easier than that!
And don’t forget, besides doing your regular payroll quarterly tax reports (941, state unemployment, state income and perhaps local) you also need to file your end year 940 (Federal Unemployment) report.
All done – well now you can relax. But wait – what about the workers compensation audit? And the closing out of the books? And the prep work for the accountant? A bookkeeper’s work is never done!
Copyright all rights reserved D. L. MacMillan
Donna MacMillan, Advanced Certified QuickBooks consultant offers a unique set of services covering all aspects of successful business growth and financial health for all business types and sizes.
Take your business to the next level with the training and answers you need when you need them. Private and confidential. Over 30 years experience helping businesses grow through better financial management.
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