Year-End Payroll Issues Presented by Bronwyn Betts

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Year-End Payroll Issues Nothin’ But Net!

Presentation Contents You’re in the Playoffs – Let’s Prepare to Win! 1 Bonus Payroll Employer Health Contributions Non-Monetary Fringes FICA - Limits Third Party Sick Pay Social Security Numbers Good Numbers to End the Year With W2 Ordering, Printing, Electronic Submissions

Bonus Checks All Good Players Deserve Incentives 1 Planning For Bonus Pay Are bonuses going to paid in checks or with direct deposits? When are we cutting these bonuses? Are the employees allowed to dictate federal & state? Should taxes be withheld at a flat % rate? 2 Payment Groups 3 Adjusting Taxes Withheld & Grossing Up Bonuses

Employer Health Contributions Investing In the Players’ Health Brings Great Contributions 1 Planning for Reporting of Health Contributions Is my company required to report Health Contributions on the W2? Have I been contributing with every payroll already? Where am I getting my information from and when will I get it? Have I gone live in F OUNDATION this calendar year? 2 W2 Box 12 Worksheet 3 Setting up Health Contributions for Next Year

By changing the Plan Type to “Section 125,” the “ER Contribution” tab becomes enabled.

This allows amount and descriptions to show on the employees’ check stubs. This allows contributions to be reported on the W2. (Retroactive) Identify the G/L accounts to expense and accrue this benefit. Enter the amount per pay per employee. The amount you enter here can be overridden on each employee’s file.

When you enter the deductions for the EE, the “ER Contribution” tab will become available. Enter health deductions and the amounts that EE deducts here. Only right-click and “Add” if you need to overwrite the employer amount that was set on the “ER Contribution” tab on the miscellaneous deduction.

Non-Monetary Fringes Intrinsic Value is Still Value 1 Planning for Reporting of Non-Monetary Fringes Does any employee receive a value that they need to be taxed on? Where will I get this information from? Can I get this before the year end? Is this something I do throughout the year next year? 2 Non-Monetary Fringes in Last Payroll(s) - Easiest Method 3 Non-Monetary Fringes After the Last Payroll for the Year is Complete – History Adj

FICA Limits Every Team Needs to Know Their Limits 1 FICA – Earnings up to $118, Social Security = 6.2% Medicare = 1.45% 2 FICA – Earnings between $ $199, Social Security = 0% Medicare = 1.45% 3 FICA – Earnings of $200,000 or more Social Security = 0% Medicare – 2.35% (1.45% + Additional.09%) Note: Employer still matches only 1.45%

Third Party Sick Pay Sometimes You Just Have to be put on the Injured Reserve List 1 Planning for Reporting of Third Party Sick Pay Who has to do the W2? Is the money that is paid to the employee taxable? Can I get this before the year end? Has this employee worked for you at all in the calendar year? 2 Set Up a Third Party Sick Pay Earn Code and Watch the “W2” Tab Setup 3 Two History Sets Adjustments First one to record the employer’s portion of taxes and taxability Second one to record the employee’s withholding for W2 purposes

Third Party Sick Pay History Adjustment Steps Sometimes You Just Have to be put on the Injured Reserve List 1 Set up your earn code as TPS and mark the “W2” tab to show in the 941 Report 2 Enter History Adjustment #1 Record the employer portion of FICA and taxable amounts only. Post in current year and do not enable the Bypass G/L checkbox. Make sure that you purge the timecards when done. 3 Enter History Adjustment #2 Record the employee’s port of FICA already withheld by the employee Post in current year and do enable the Bypass G/L checkbox. Make sure that you purge the timecards when done.

Social Security Numbers Your Teams Numbers are Relevant 1 Payroll Control File – Determines if duplicates are allowed. Always set to “Prevent” 2 Check Social Security Numbers are valid when you hire! Filing mid-year with wrong SSN will require refiling 3 W2s Validate SSNs Certain numbers are not assigned by the government You can still print W2s with incorrect SSNs

Year-End Checklist Looking at the Stats Makes Sense Actions we shouldn’t do Don’t assume everything is correct if you’ve never checked things through out the year Don’t change numbers just because they don’t look right Don’t make P/R history adjustments for prior quarters unless you want to resubmit quarterly filings Actions we should do Print the Earnings & Deductions for the entire year Do the math and make sure that taxable amounts are correct Make P/R history adjustments for last quarter with a post date of 12/31/15.

Rules For Good Numbers Looking at the Stats Makes Sense Pre-Tax Deduction Rules Pre-tax health deductions (Section 125) are pre-tax for FICA, federal, state, and Ohio locals. 401K, IRA, SEP are pre-tax for federal, and most states (excluding CA and PA) Watch for taxable union fringes and FICA limits Standard Balancing Look at earnings and determine only taxable amounts Taxable minus pretax deductions or limits If something not matching, consider P/R history adjustments.

W2 Printing Steps Order W2s 1 Order forms from Dynamic Systems. You can order from other printers but you may need to perform adjustments. Do this in November at the latest. Do a Test Run 2 Practice W2 printing by doing a test run ahead of time. W2s are nothing more than reports and they can be done multiple times. Update FSI 3 The W2 often changes year-to- year. The formatting of the actual form will take place in a F OUNDATION update around Christmas week. Print Forms 4 Print your forms by doing a federal run first. You can usually take care of all your needs. But if you have employees that withheld in 3+ state or locals, further runs may be necessary

W2 Electronic Submission Steps Register with IRS 1 You must register with the IRS to submit electronically. You will be given a PIN number which is vital to creating the electronic file in F OUNDATION. Allow 6-8 weeks for government to get you the PIN. Do a Test Run 2 Practice W2 exporting by doing ahead of time. W2s are nothing more than reports and can be done multiple times. Update FSI 3 The W2 often change year-to - year. The formatting of the actual electronic file will take place in a F OUNDATION update around Christmas week. Run Electronic & Post 4 Run the report, filling out all pertinent fields. When you see the report, click on the Post icon on the toolbar and save the file to an area you can retrieve. Log into the IRS website and upload that file.

Thanks for Attending Year-End Payroll Issues