Year-end’s Coming, Get Ready Now!
*Article Updated: 11/18/2020
A lot goes into making every construction payroll run accurate, successful and compliant — especially at year-end. Between ACA information returns, W-2s, end-of-the-year close and holiday bonuses, you need to make sure you’re prepared. Here are a few points to keep on your radar.
1. Be Aware of Your Deadlines
First, be mindful of the deadlines in front of you, as well as the fact that some dates have changed from last year. As you look around the Internet, you’ll see several dates repeated across different blogs. Generally for the Affordable Care Act (ACA) reporting, employers are looking at the following timetable:
|March 2, 2021||Provide Forms 1095-B or 1095-C to employees|
|February 28, 2021||File information returns to the IRS by paper|
|March 31, 2021||
Or, file information returns to the IRS electronically
That said, the official word on your company’s deadlines comes only from the IRS. And there are exceptions to these dates. For example, some companies may be eligible for transition relief in exceptional cases. Further, general deadlines can be subject to change. It’s important to make sure you’re tracking confirmed deadlines with the IRS and that you’re aware of any special circumstances that could affect your timelines as you work with your construction CPA and any ACA service provider.
For W-2s, the Social Security Administration’s (SSA) official deadline both to file and distribute copies to employees is January 31, 2021. Penalties for a failure to provide correct information on time have also increased from last year.
2. Confirm Employee Information
To help avoid penalties, make sure you have all of your employee payroll information ready, up-to-date and in the right format. If nothing else, this can also prevent you from having to redo your W-2s! One good practice is to enclose a slip of paper with each employee’s paycheck in the autumn that asks them to verify their information. This includes:
- social security numbers
- addresses and zip codes
Yes, even employee names need to be verified! Keep in mind, an employee may have had a marriage or divorce in the past year they didn’t think to share or haven’t wanted to share with their employer. Employees may not realize that they need to notify you of address changes either. So it’s necessary for employers to be proactive in ensuring these are accurate.
3. Schedule Ahead
Finally, make sure you leave adequate time for all of your year-end procedures. You may need to schedule a special payroll run for bonuses. Additionally, if your current payroll software doesn’t produce key reports your company typically requires at year-end, you may also need to account for additional time both to prepare and to proof the data. Don’t underestimate how much time this takes if you’re going to be using spreadsheets alone.
As much as possible, you’ll also need to prepare for the unexpected. In addition to more tasks, year-end can also produce greater surprises. An office staff can suddenly be hit hard with a round of colds. Plus, as the holidays loom near, vacation schedules can provide serious obstacles to your normal workflow. This is where a good contingency plan comes in handy. Even better, it could be worth looking into a construction payroll and tax-filing service to partner with in 2021.