It’s the most wonderful time of the year!
…Or at least you wish that it was. As accounting professionals, we are always scrambling at this time of
year, trying to get our client’s payroll and employee information in a row for year’s end. But this process doesn’t have to be filled with the uncertainty and stress of getting clients to prepare for the what’s coming!
So what exactly can we do, as accounting professionals, to help our clients better prepare for year’s end? Here are a couple of things that you can remind them of, so they won’t be scrambling by the time their deadlines roll around in the coming year.
Make sure that your clients have been keeping an accurate record of their payroll accounts. Do they have all the current contact information and mailing addresses of all their employees from the past year (active and inactive)? Let them know this will be much easier to get their employees their tax forms they need in January. It will save you both a lot of time and hassle if you do this now!
New W-4 forms
Make sure your clients have access to new W-4 forms for their employees that need to make changes to their federal filing status (marriage, children, or need additional withholdings). You and your clients can find the most updated W-4 forms here: https://www.irs.gov/forms-instructions
End of Year Bonuses
Everyone loves their bonuses, right? Well, make sure that your cash basis clients pay out all bonuses by December 31st. That way, your client can claim bonuses as a tax deduction for the current year. Clients that report on an accrual basis have until March 15th to pay out bonuses and claim the tax deduction for the previous year.
Here’s a great resolution: Encourage your client to pay all employees via direct deposit! It’s safe, secure, and economical. If they have employees that don’t want direct deposit, they can offer the option of a pay-card. (Pay-cards operate much like an ATM/debit card. Their pay is deposited directly to the card instead of through their bank account.) Some states have already have laws allowing companies to mandate paying their employees through direct deposit. To find out which of your clients that applies to, you can follow this link to the state’s department of labor.
Do your clients offer flexible spending accounts that don’t roll over to the new year? Suggest they send reminders to their employees to use (or lose) these funds by the December 31st deadline. These kind of accounts can include healthcare or dependant care. I’m sure their employees will appreciate the reminder!
Do your clients offer benefits such as company provided transportation, parking, or personal use of company vehicles? If so, these are part of their taxable fringe benefits. Remind clients these items must be included in payroll before year end so they are reflected on employee year end W-2 forms.
Did your client receive notice of changes in their required tax deposit schedule or state tax rates for the new year? Make sure they update their records or notify their payroll service provider of any changes. If you do this now, it can help eliminate potential penalties and interest for late or incorrect payments in the future.
Is your client’s current payroll service able to keep up with their current needs of services and features? This may be a great time to schedule a meeting with them to review their needs. This will allow you to make recommendations for an appropriate payroll software or service provider. As we all know, making changes for January 1st is way less expensive and much simpler for everyone.
Make sure that you take the time to talk to each of your clients about these topics. Providing this information to your clients in advance will make the transition to the new year will make for a joyous holiday season, and a stress free new year!