Thursday, October 1, 2009

End of the Year Wage Reporting Preparation

The leaves are falling and though we may not want to believe it is already that time of year it is coming. The end of the year can be busy for many different reasons back to school, holidays and the looming tax season. Now is the time to start preparing for end of the year wage reporting. New business owners and seasoned veterans alike should get themselves organized for the end of the year. Preparation is key to the process running smoothly.

Beginning in October you can order your forms. You can order paper forms or form printing software. Form printing software allows the user to print W2 and W3
A beneficial feature to look for when purchasing software is laser substitute printing. Laser substitute printing government approved W2 copy A and W3 forms to blank paper. You may have a payroll software that generates W2 forms in this case you may already be equipped with the supplies you need.

In November you can expect Federal Tax Employment Forms, IRS Pub No. 393 and MMREF-1 (Magnetic Media Reporting and Electronic Filing) booklet. IRS Pub No. 393 should include a label which is to be attached to the W3 form. MMREF-1 booklet is for those employers whom electronically file their wage reports. The booklet contains specifications and edits for filing wage reports electronically. An electronic file must meet the government specifications. To generate an acceptable file employers must use a software program that generates that particular format. As stated earlier form printing software that also has this capability can be most beneficial.

By December you should have informed your employees to update their federal income tax withholding form (W-4), file a new Earned Income Credit Advance Payment Certificate (W-5) and report any name changes if necessary. If you have any employees which claimed an exemption from federal income tax withholding in the past year should file a new W-4 forms before February 18th. On February 19th you will have to start withholding at a single person rate with zero exemptions if those employees have not filed a new W-4 form.

These few steps will help you prepare to issue W2 form to your employees and file W2 A and W3 forms with SSA. You will also be organized going into the next year. If you do not use payroll software or are being priced out of your current software the beginning of a new tax year is a perfect time to invest in a new program.