Closing out payroll for year-end is a daunting task. There are so many things to remember and to stay compliant with that it is easy to overlook specific steps. But never fear—with good resources and a proactive approach, you can end your year strong and stay prepared for 2022.
Following are some of the different insights and resources that will help make wrapping up your 2021 payroll easier.
Tax Law Changes 2021
Because payroll tax laws are ever-evolving, it can be challenging to stay in the know. So for 2021, I want to share a few changes and resources to help you remain compliant and prepared for ending your year strong:
- Payment category changes have been made for 1099-NEC and 1099-MISC
- Washington State implemented a new tax for the Washington Cares Health Fund for 2022
- The Employee Retention Credit recently has expired
Year-End Checklists
There are many steps in wrapping up payroll for the year, which is why having a checklist can be very beneficial. To end your year with confidence, here are a few payroll year-end checklists for the various types of payroll platforms:
- QuickBooks Online Payroll Year-End Checklist
- QuickBooks Desktop Payroll Assisted Year-End Checklist
- Paychex Year-End Checklist
- ADP Year-End Checklist
- IRS provides tax inflation adjustments for the tax year 2021
Important Dates to Remember for QuickBooks Online Payroll
- Dec. 30, 2021 by 5 p.m. (PST): If you’re using QuickBooks Online Payroll Core, this is the last day to approve next-day direct deposit payrolls and additional tax payments for a 2021 pay date
- Dec. 31, 2021 by 7 a.m. (PST): If you’re using QuickBooks Online Payroll Premium or Elite, this is the last day to approve same-day direct deposit payrolls and additional tax payments for a 2021 pay date
- Jan. 15, 2022: Employees will be able to view their W-2s through their Invite Workforce portal
- Jan. 27, 2022 by 5 p.m. (PST): If you're using the QuickBooks e-file service, this is the last day you can submit for timely processing of contractor 1099s and W2s
- Jan. 31, 2022: This is the last day to provide 1099-NEC to contractors and W-2s to any employee who earned wages in 2021
Filing and Reporting Deadlines for Year-End Payroll.
You can learn more here.
Additional Tips
In order to keep your reports accurate, it is best to complete all payroll tasks before the end of the year. It is essential to review and verify all employee information, including names, Social Security numbers and addresses. This will keep you from the time-consuming task of revising and resending these documents at a later date.
Outside of reporting information to the IRS, year-end payroll is a great opportunity for companies to review their payroll choices, including payroll processor and entity type. Running year-end payroll reports can provide you and your clients with the information you need to make decisions regarding any payroll changes you want to make going into the new year.
Liz Scott is a multi-business entrepreneur working to bring together technology and accountants through her business, Liz Scott Consulting. A member of Intuit Trainer/Writer Network, she authored and taught Master level courses, including Advisory Guides and Consulting Tools for Accountants. In addition to Liz Scott Consulting, she also owns Accounting Lifeline, a firm to serve small businesses with their financial needs. Liz is a co-host of the "Appy Hour," which helps other accountants learn about the different tools and apps for small business needs. Holding a high passion for real estate investment, she owns properties throughout Oklahoma.
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