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QuickBooks Desktop Payroll Year End Checklist

Use this year-end checklist to prepare your tax forms in QuickBooks Desktop Payroll Basic, Standard, or Enhanced.

As the end of the year approaches, it's important not to miss any of the necessary tax activities that need to be completed. Some of the changes this year announced by the IRS may impact you as an employer. Staying on top of these changes can help you plan accordingly.

The following sections outline year-end tasks and activities to complete and the key deadlines to follow.

Before you begin your year-end preparations, it's a good idea to make sure you install the latest payroll update.

To install the latest QuickBooks Desktop Payroll update:

  1. Review QuickBooks Desktop Payroll News and Updates to find the latest payroll update version.
  2. In QuickBooks Desktop, from the Employees menu, select Get Payroll Updates.
  3. Check that you have the latest payroll update version.The tax table (payroll update) version number is located at the top of the window.
  4. If not, select Download Entire Payroll Update, and select Update.

The best way to make sure you have the latest QuickBooks Desktop and payroll updates is to turn on the Automatic Updates feature. With this feature, QuickBooks Desktop checks for new payroll updates automatically. Automatic Updates is the easiest way to stay on track with updates.

If you don't turn on Automatic Updates, make sure to check for new updates every time QuickBooks Desktop prompts you to. QuickBooks Desktop Payroll releases payroll updates as many as 12 times in a year, and sometimes more, because federal and state governments make changes to their tax laws, rates, and forms at any time during the year.

Since the actual number and dates of payroll updates vary depending on federal and state actions, we strongly recommend that you connect to the payroll service each time you pay your employees (or at least every 45 days) to ensure that you have the most current tax table and forms available.

For instructions about updating your software and enabling or disabling Automatic Updates, see the QuickBooks Product Updates page. If your QuickBooks Desktop product is not selected, select Search Again.

To order your year-end supplies from Intuit:

To ensure posting compliance with recent state labor law changes, visit the Compliance web site.

Intuit recommends you order your year-end supplies as soon as possible to ensure timely delivery and distribution.

The end of the year is a good time to review employee information that can affect W-2 forms and, possibly, paychecks issued in the next tax year.

Be sure to check:

  • Names and addresses
  • Social Security Numbers
  • Retirement plan eligibility

To review employee data in QuickBooks Desktop:

  1. In the Employee Center, select the Employees tab.
  2. Select the employee name from the drop-down list, and double-click the employee name to review names, addresses and Social Security Numbers for any errors or missing information.
  3. Select the Payroll Info tab.
  4. Verify that the Employee is covered by a qualified pension plan checkbox is selected in the employee record when appropriate.The same checkbox will be selected on Form W-2.You can also select or clear the checkbox directly on the W-2 form.
  5. Make any changes necessary.
  6. Select Ok.

To create a bonus check for an employee:

  1. In the Employee Center, select the Payroll tab.
  2. Select the Pay Employees tab, and in the Create Paychecks section, select Start Unscheduled Payroll.
  3. In the Enter Payroll Information window, select the employee to whom you're giving a bonus.
  4. Select Open Paycheck Detail.
  5. Remove any earnings or benefits for the selected employee by clearing each field that has a rate or number.
  6. In the Item Name field, add the bonus item, and enter the amount of the bonus in the Rate field.To give the employee the entire bonus amount, select the Enter net/Calculate gross option (only available in Enhanced Payroll).
  7. Verify that the Do not accrue Sick/Vac checkbox is selected.
  8. Select Save & Next or Save & Close.
  9. Select Continue.
  10. Select Create Paychecks.

Regardless of their current employee status, any employee who received a paycheck during the year will receive a W-2 form for that year.

Be sure to check terminated employees for:

  • Name and address
  • Social Security Numbers
  • Retirement plan eligibility

Be sure that terminated employees are released correctly in QuickBooks Desktop.

To verify that terminated (released) employees are set up correctly:

  1. In the Employee Center, select the Employees tab.
  2. Change the View to All Employees.
  3. Select the name of the released employee, and select the Transactions sub-tab.
  4. Double-click the termination (typically last) paycheck and select Paycheck Detail.
  5. Ensure all vacation and sick time has been paid out.
  6. Close out of the paycheck without saving any changes.If you need to pay out vacation or sick time, create a new check for this amount and deliver to the employee.
  7. Double-click the name of the released employee to access the Edit Employee window.
  8. Select the Employment Info tab, and select the Termination sub-tab.
  9. Verify that all information is current and that the Release date is correct.
  10. Select Ok.

Before you create paychecks in the new tax year, confirm that all compensation and benefit types are correct, and that the rates for each is correct.

Be sure to check for:

  • Deferred compensation
  • Group term life insurance
  • Third-party sick pay

To review benefit information:

  1. From the Lists menu, select Payroll Item List.
  2. Double-click the item to review the setup.
  3. Navigate to the Tax Tracking type window and verify that the correct Tax Tracking type is selected.If you are unsure what Tax Tracking type should be selected, consult your accountant or the agency that manages the benefit for your company.
  4. Navigate to the Default Rate and Limit window and ensure the default rate and annual limit are correct.If there are different rates or limits for individual employees, you can ensure these fields are blank and set the rate and limit for each employee separately.
  5. Select Finish.

To review any benefits that have been added to the employee defaults or to an individual employee record:

  1. In the Employee Center, select the Employees tab.
  2. Double-click the employee name, and select the Payroll Info tab.
  3. Review the information in the Additions, Deductions, and Company Contributions section.
  4. Select a field to edit the information, and then select OK.
  5. Select Ok.

Any future paychecks created for that employee will include the new information.

For more information about retirement benefits limits and contribution deadlines, visit www.irs.gov.

Before your first payroll of the new year, you may want to take the time to review wages and benefits for all active employees.

To do so:

  1. In the Employee Center, select the Employees tab.
  2. Double-click the name of an employee to access the Edit Employee window.
  3. Select the Payroll Info tab, and ensure the items, rates, and limits are correct in the Earnings and Additions, Deductions, and Company Contributions sections.
  4. Select Ok.

To review sick and vacation hours for an employee:

  1. From the Employee Center, select the Employees tab.
  2. Double-click the name of the employee to access the employee record.
  3. On the Payroll Info tab, select the Sick/Vacation button.
  4. In the Sick and Vacation sections, review the settings.For example, if your company sick or vacation policy resets hours every January 1st, verify that the Reset hours each new year checkbox is selected.
  5. Select Ok.
  6. Select OK again.

If your state unemployment rate has changed, you must update the rate in QuickBooks Desktop.

To update your State Unemployment Insurance (SUI) and State Disability Insurance (SDI) rates in QuickBooks Desktop Payroll:

  1. Verify the current SUI and SDI rates for your state.
  2. In QuickBooks Desktop, from the Lists menu, select Payroll Item List.
  3. Select your state disability insurance or your state unemployment insurance payroll item.If your state disability insurance is collected by a private agency, the associated payroll item may be set up as Other Tax, not State Disability.
  4. Select the Payroll Item button, and select Edit Payroll Item.
  5. Select Next until the Tax Rates window opens.
  6. Enter the new rate in the Company rate or Employee rate field.You must enter the rate for each quarter.Note: New SUI rate fields appear on screen towards the end of the year. If available, you can enter next year's SUI tax rates before the start of the new year in these fields.
  7. Select Next.
  8. Select Finish.

Important Dates

The following sections provide important filing dates related to year-end processing.

Deadlines for Forms W-2, W-3, 941, 943, 944, and 940 payments

The following deadlines apply when processing Forms W-2 and W-3, Form 941 (4th quarter), Forms 943 and 944, and 940 payments.

  • Furnish Form W-2 copies B, C, and 2 to each person who was your employee during the previous yearSee General Instructions for Forms W-2 and W-3 .
  • Send Copy A of Forms W-2 and W-3 to the SSA
  • File Form 941 (for Q4), Form 943, and Form 944 with IRS
  • Deposit 940 payments if undeposited FUTA tax is more than $500 on February 1

Deadlines for 1099-MISC Forms

The following sections provide important deadlines for filing Forms 1099-MISC.

  • Filing deadline for reporting non-employee compensation payments in Box 7
  • Deadline for providing contractors and vendors with 1099-MISC copies

Due date for providing 1099-MISC statements to recipients for amounts reported in Box 8 or 14

  • Filing deadline to IRS (paper forms) if filing for amounts reported outside of Box 7
  • Form 1096 must accompany all paper submissions

Deadline for e-filing with IRS if filing for amounts reported outside of Box 7

 

Holidays

To learn more about how holidays affect payroll processing, see How will federal holidays affect my payroll processing?

 

Download PDF version

To download a PDF version of this checklist to print or save to your desktop, see Download PDF

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