The calendar year end of 2023 is fast approaching - it’s time to start preparing for the year-end payroll process. Business owners should be aware of all responsibilities and make sure to have deadlines, important dates and resources up to date.

This article provides an overview of the year-end payroll process and guidance on each step.

Year-End Payroll Process Overview

• Check important dates and deadlines
• Verify company information
• Verify employee information
  • Employee names
  • Employee social security number
  • Employee status
  • Employee wages
• Verify pay periods
• Calculate year-end bonuses and include them in the final payroll
• Review employee leave balances
  • Include accrued PTO in the final payroll if it’s the company’s policy to pay it out in the end of the year
• Run the last payroll
• Order forms
• Send Form W-2 and 1099 to employees and independent contractors
• File forms with tax authorities
• Pay outstanding taxes

When Does the 2023 Payroll Year End?

It is essential for business owners to stay informed about the crucial payroll year-end dates for submitting payroll forms and tax information. Due to variations in state regulations, business size, industry, and other factors, different businesses may have distinct tax obligations and deadlines. However, the following deadlines generally apply to most businesses:

• Jan 31, 2024
  • Form W-2 and W-3 for each employee
  • Form 1099-NEC for contractors
  • Form 940 and 4th quarter FUTA taxes deposited
  • Quarterly Form 941 tax return or the annual Form 944
• March 15, 2024
  • Annual tax return (for partnerships, multi-member LLCs, and S-corporations)
• April 17, 2024
  • Annual tax return (for C-corporations)

What Payroll Tax Forms Do I Need?

There are several forms employers need to complete and file as part of their year-end payroll process.

• Form W-2: Employee wages and tax withholdings
• Form W-3: Summarize the information in W-2 forms, submitted with W-2s
• Form 1099-NEC: A statement of income for contractors
• Form 1096: Used by businesses that paid contractors using Form 1099-MISC that summarizes their payment information
• Form 940: used to pay Federal Unemployment Tax (FUTA) to the federal government
• Form 941: Report income tax withholding as well as employees’ share of Social Security and Medicare taxes, plus the employer’s share of FICA
• Form 944: Used by businesses that withheld FICA (Federal Income Tax) of less than $1,000
• Forms 1095, 1095-B and 1095-C: Required as part of the ACA (Affordable Care Act) to prove proof of coverage. Form 1095 for employers with 50+ full-time employees or FTE-equivalent in the preceding calendar year. 1095-B for self-insured small businesses under 50 employees. 1095-C for self-insured businesses 50 employees and greater.

For more federal tax forms that your business needs, see the IRS employment tax forms list.

Year-End Payroll Checklist: What To Do Before the Last Payroll of the Calendar Year 2023?

Here are the steps you can take to prepare before your last payroll of the calendar year.

• Verify company information: Verify your business information on file for tax purposes and make sure all the details are correct.
  • Company name
  • Company address
  • State and federal employer identification number (EIN)
  • State unemployment account numbers
• Verify employee information
• Compensation for next year
• Finalize annual bonuses
• Check employee benefits
• PTO
• Sick days
• Verify processed payroll
• Order tax forms

Year-End Payroll Checklist: What To Do After the Last Payroll of the Calendar Year 2023 but Before the First Payroll of 2024?

While the majority of the preparation for the year-end payroll process is usually completed by this point, there are still some remaining steps to take after processing the final payroll of the calendar year.

• Finalize wage, benefits, tax information
• Send W-2 forms to all employees
• File year-end payroll taxes to the IRS
• Review the payroll schedules for the coming calendar year

Get Help with Year-End Payroll Process

Having challenges navigating the year-end payroll process on your own? In the search for better payroll services and software? Or simply having questions about specific steps of the year-end process? You can always consult with a payroll service provider like The Human Resource Consulting Group and get the guidance and support you need to make sure your year-end process runs smoothly.