EOY Checklists

8/10/2019 EOY Checklists

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T H E U LT I M AT E G U I D E :

GETTING YOUR BUSINESS READY FOR END OF YEAR


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TA B L E O F C O N T E N T S

Introduction

The Quick Checklist

Getting Your Employees Ready

The Checklist for Getting Your Employees Ready

Getting Your Accounting Ready

The Checklist for Getting Your Accounting Ready

Getting Your Taxes Ready

The Checklist for Getting Your Taxes Ready

How ZenPayroll Can Help

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3/15

INTRODUCTION

The end of year can be a very stressful

time for you and your business. Thats

why we wanted to help take some of the

anxiety out by providing you a helpful

guide on how to get your business ready

for the end of year.

Weve broken this guide into three

pertinent sections for your business:

employees, accounting, and taxes. Each

section includes detailed to-dos, best

practices, and common areas of concern.

We also provide a printable checklist in

each section so you can quickly stay on

top of things.

At ZenPayroll, we try to make payrolleasy and delightful. We believe many

of the anxieties for your companys end

of year preparation stems from legacy

processes and confusing information.

With this guide, we hope to help small

business owners like you navigate the

ins and outs of getting your business

ready for end of year.

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GETTING YOUR EMPLOYEES READY

VERIFY EMPLOYEE DATA

Verify Employee Name

Verify Employee Address

Verify Employee Social Security Number

File W-2

VERIFY EMPLOYEE BENEFIT INFORMATION

Confirm retirement plan eligibility

Confirm health benefits (and imputed wages)

Confirm fringe benefits

Review sick time

Review vacation time

Review deferred compensation

VERIFY CONTRACTOR INFORMATION

Verify Contractor Name

Verify Contractor Address

Verify Contractor Identification Number

File 1099

END OF YEAR EXTRAS

Grant year-end bonuses (if any)

Appreciate your team!

GETTING YOUR ACCOUNTING READY

PROFIT & LOSS REVIEW

Categorize your expenses

Look for anomalies

Review P&L again after adjustments

COLLECT W-9S

Collect W-9s from vendors and contractors

Issue 1099s for vendors (ZenPayroll will do this for

you) who youve spent $600 or more for services

GATHER AND ORGANIZE YOUR RECEIPTS

Gather receipts

Organize receipts by category

Copy down your thermal receipts

RECONCILE YOUR BANK ACCTS AND CREDIT CARDS

Check end-of year bank and credit statements match

your financial statements.

Match your accounting software ledger balance with

your accounts

ACCOUNTS RECEIVABLES AND INVOICES

Collect outstanding invoices before year-end

Check your Days Sales Outstanding to see if there

areas of concern

TAKE PHYSICAL INVENTORY

Match physical inventory with balance sheet

Appraise current value of inventory

GETTING YOUR TAXES READY

GO OVER YOUR BOOKS

See checklist on Accounting

Gather and Organize Your Receipts

See checklist on Accounting

Home Office Deduction

Check to see if you qualify

Calculate your deduction

Vehicle and Mileage Deduction

Calculate your deduction at $0.56 per mile

Deduct additional costs like parking fees and tolls

Payroll Taxes

See checklist on Employees

Travel Expenses

Collect your travel information including plane fare,

lodgings, meals, taxis, fees, tips

THE QUICK CHECKLIST

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5/15

GETTING

YOUR

EMPLOYEESREADY

The end of year is an important

time for every company, especially

for your employees. As a business

owner or employer, there are a

multitude of things you have to get

done to make sure your employees

are ready and compliant for the end

of year. Thats why we put together

this checklist to help you get your

employees ready for end of year.

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1. VERIFY EMPLOYEE DATA

Its important to review employee data for the end of

the year, particularly with employee names, addresses,

and social security numbers. Improperly filing this could

lead to penalties for each mis-filed W-2. Check with your

employee to make sure his or her employee information

is correct.

If youre still not certain about your employees social

security number or just want to get it verified, the IRS

provides employers with the Social Security Number

Verification Service (SSNVS) to minimize employee name

and SSN mismatches.

You can access all this information on your ZenPayroll

dashboard for employers and employees. ZenPayroll will

automatically calculate and electronically file your W-2s,

but you can access it anytime. The deadline to furnish the

W-2 is on February 2.

Dont forget you have to verify employee data for both

active and terminated employees.

2. VERIFY EMPLOYEE BENEFITS

We often set and forget employee benefits. But the end

of the year is an important time to verify your employee

benefit information for your employees.

For most retirement benefit information, like your 401(k),

youll want to give advanced notice of benefit notices, like

enrollment features and withdrawal provisions to your

employees. If your company matches, your employees

may want to fully-fund their plan by the year-end. The

limit is $17,500 per employee and the catch-up for

employees over 50 is $5,500. For more information on

retirement plans for small businesses, check out the IRSs

page 401(k) for small businesses.

For health benefits, youll want to confirm your employees

have selected and contributed to their respective health

care plans year to date. For employees on a Flexible

Spending Account (FSA), make sure your employee has

spent the money in their FSA before the end of the year

(or the grace period), or else theyll lose any money in

their FSA. If your plan has a $500 carryover option, let

your employee know.

If youve offered fringe benefits to employees, youll

want to make sure youve withheld taxes for any taxable

benefits your employee has received throughout the

year that have not already had their taxes withheld. This

includes fringe benefits such as: personal use of company

car, employer provided parking, and employer provided

cell phones.

Some of these fringe benefits may be considered imputed

wages. An imputed wage is additional income typically

associated with a service. A popular form of imputed

wages that require an end of year adjustment is group

term taxable life insurance coverage over $50,000.

For more information on taxable fringe benefits, check out

IRS Publication 15-B.

For more benefit related content, check out SHRMs Year-

End Checklist for Retirement and Health Plan Sponsors.

Finally, be sure to confirm all sick and vacation time spent

by your employees. If your employee has sick pay, youll

want to make sure its been withheld properly. Generally,

sick pay is withheld like normal wages and you have to

withhold taxes for employee and employer social security,

Medicare, and Federal Unemployment Tax Act (FUTA).

There are some exceptions so check the IRS for the full

list. For some companies that have a rollover, youll want

to count what dates are available for next year.

Deferred compensation can also be tricky. Your

employees wages may be taxed this year if it does not

meet the requirements of Section 409A. Check the IRS

site for more information.

3. VERIFY CONTRACTOR INFO

Youll want to make sure all your contractor information

is in one place. Like with employees, youll want to verify

your contractors name, address, and identification

number. The ID number can be a contractors SSN, ITIN,

ATIN, or EIN. For information on how to fill out the 1099-

MISC, check out the IRS page.

As with your W-2s, ZenPayroll will electronically file all

1099-MISCs for you and send them to your contractors.

Youll have them available at all times on your dashboard

as well.

If youre switching payroll providers to ZenPayroll and

you run payroll before the end of the year, we can manage

your current years contractor 1099s. Of course, be careful

you dont double file your 1099s with another provider.

4. END OF YEAR EXTRAS

There are always a few loose strings at the end of the year

youll want to watch out for. In particular, the end of year

is a popular time to give bonuses.

With ZenPayroll, we recommend giving bonuses

throughout the year with our spot bonus feature. But if

you plan on giving them out at the end of year, be sure the

bonus has its taxes withheld.

Finally, theres no better time than the end of year to

appreciate your team. Of course wed hope youre doing

this throughout the year too, but nows the time to plan a

company holiday party or white elephant gift exchange.

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DIFFERENT BONUS TYPES!

1. Give something that isnt money: nice

leather goods or quality made athletic gear

will have a more lasting impression in their

day to day lives.

2. Gifts for their entire family: Sending

your employee monthly flowers or a gift

certifiacte for two at a nice restaurant will

help bring the good cheer to their home.

3. Let employees give back to the

community: Prosocial bonuses that inspire

employees to help others can increase

their happiness and job satisfaction

4. Give them something to experience:

Giving your employees a paid vacation will

help broaden their horizons and give themsomething to look forward to.

5. Give praise. One of the most neglected

but effective ways to show your gratitude

is praising your employees in front of their

peers. It is a great motivator and can really

bring a lot of satifaction. And a plaque

wouldnt hurt either!

CHECKLIST 1:GETTING YOUR EMPLOYEES READY FOR END OF YEAR

1. Verify Employee Data

Verify Employee Name

Verify Employee Address

Verify Employee Social Security #

File W-2

2. Verify Employee Benefit Info

Confirm retirement plan eligibility

Confirm health benefits

Confirm fringe benefits

Review sick time

Review vacation time

Review deferred compensation

3. Verify Contractor Info

Verify Contractor Name

Verify Contractor Address

Verify Contractor Identification Number

File 1099

4. End of Year Extras

Grant year-end bonuses (if any)

Appreciate your team!

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8/15

GETTING

YOURACCOUNTING

READY

One thing that is important to do

at the end of the year is to closeyour books. Thats why we put

together a check-list of the most

common accounting to-dos for the

end of year. Whether you work with

a CPA, bookkeeper, or just DIY,

this checklist should help get your

accounting ready for end of year.

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1. PROFIT & LOSS REVIEW

The first thing you should do before and after this

checklist is review your profit and loss statement. It s a

good reminder to see how youre spending your money

but also if your expenses are categorized.

Fortunately, if you use an online accounting provider

like Xero or Freshbook, they can sync directly with

your bank account or credit card statement and help

you categorize your expenses.

Return to your P&L again after you reconcile your

bank accounts, receipts, and other potential concerns.

2. COLLECT W-9S

Did you use vendors this year? If so, youll have to

collect W-9 forms for each of them. The W-9 form

can be used as a paper trail for the IRS to track your

expenses. Its also a way for the government to keep

track of vendors and their income.

For every vendor youve spent $600 or more for

services, youre required by law to issue and complete

a 1099 form. The 1099 must be filled out by January

31 and sent to the IRS by February 28 (or March 31 if

you file electronically. Fortunately, your accounting

software solution will likely have a line item for all

1099 vendors and contractors. In addition, ZenPayroll

will file the 1099s on your behalf.

3. GATHER AND ORGANIZE YOUR

RECEIPTS

Its important to gather and organize your receipts. A

shoebox of receipts is the last thing your CPA wants

to see. An easy way to organize your receipts is to use

a software solution, which syncs with your credit card

or bank account. That should help you account and

categorize many of your expenses, which helps you

reconcile your paper receipts. Be sure to copy down

your thermal receipts because they have a tendency to

fade too.

4. RECONCILE YOUR BANK

ACCOUNTS AND CREDIT CARDS

The end of year is important to make sure what you

have in your financial statements match up with

your bank and credit card accounts and your year-

end statements. If you are using online accounting

software, its important your l edger balance matches

as well.

5. CHECK PAYROLL

A payroll provider like ZenPayroll should have

withheld taxes for your employees throughout theyear. However, there are a few common areas to watch

out if youre worried about end of year accounting.

Weve covered this the prior section but they include

withholding taxes for fringe benefits, deferred

compensation, and end of year bonuses.

6. ACCOUNTS RECEI VABLES AND

INVOICES

Theres a tendency to forget to collect on your invoices

if you dont use invoicing software. Without a good

collection system, you may have checks lost in

the mail. Read our piece on How to Master Small

Business Accounting in One Week to learn more about

invoice collection throughout the year. For end of year,

manage your Days Sales Outstanding and follow-up

with your invoices more than a few weeks out. Of

course, collecting on your accounts receivable is good

practice year-round.

7. TAKE PHYSICAL INVENTORY

For some of you, theres no need to t ake physical

inventory. For others, getting an accurate account of

your inventory is important. Youll want to match it

with your end of year balance sheet and itll also be

helpful for your bookkeeper, especially how much

youve spent on it throughout the year and its currentvalue. To determine the value, you can use the gross

profit method or the retail method.

As always, always refer to your tax specialist, accoun-

tant, or bookkeeper for counsel. All information listed

here is for the 2014 tax year.

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11/15

GETTING

YOUR TAXESREADY

Doing your own corporate taxes can

be challenging. There are a number

of deductions and rules youll want

to consider so you can minimize

your tax burden. Dont wait until

April to get your company taxes

in order. We selected a few of the

most common areas of concerns

for small business owners and put

them in this helpful checklist.

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1. GO OVER YOUR BOOKS

Theres no better time to go over your books than

now to check your P&L statement to see any red

flags, particularly if you work with a bookkeeper or

accountant. While you can always make adjustments

in the future, take time at the end of year while some

of the context is still fresh. See the prior section for

more accounting concerns.

2. GATHER AND ORGANIZE YOUR

RECEIPTS

As we mentioned previously, expense reporting can

be a real challenge in April i f youre opening a shoebox

of receipts. The IRS may audit your filing for up to

six years, so its recommended you keep a record of

your receipts for at least that long. Most accounting

software providers can even help you categorize

your expenses automatically. See here for some

recommended vendors ZenPayroll integrates with.

3. HOME OFFICE DEDUCTION

One of the most popular deductions for small

business owners (and yet not taken) is the home

office deduction. The IRS provides two methods for

calculating your home office deduction, simplified

and regular. Since most entrepreneurs will use thesimplified option, well cover that here.

First, youll have to qualify for the deduction. If you

meet the two main criteria 1) Regular and Exclusive

Use and 2)Principal Place of Your Business, then

your business is eligible. Check th e IRS site for more

information.

The simplified option uses a standard $5 per square

foot (rather than actual expenses determined by

records) to determine the deduction. To calculate your

deduction, you simply multiply the portion of home

dedicated to home office use (capped at 300 square

feet) by $5 to get your deduction, which is capped at

$1,500 (300 x $5).

Check the IRS site for updated information.

4. VEHICLE AND MILEAGE

DEDUCTION

For some small business owners, operating a vehicle is

part of their daily work. The IRS allows you to deduct

your mileage based on two methods, actual cost or

standard mileage rate.

The actual cost method requires you to keep detailed

records of your business-related expenses, which is

prohibitively difficult for many of us. If you choose to

take standard mileage method, the standard rate is 56cents per mile for business miles driven in 2014.

In addition to mileage, you may deduct additional

costs like parking fees and tolls. See here for more

information on transportation related deductions.

5. PAYROLL TAXES

The end of year is a great time to gross up any fringe

benefits tax withholding purposes if they were not

filed throughout the year. Fortunately, ZenPayroll canhelp you do this within our service. Check out our

earlier section on how to get your employees ready for

the end of year for more information.

6. TRAVEL EXPENSES

Do you travel frequently for work? If so, you may be

eligible to deduct the cost of the trip, including plane

fare, lodging, meals and incidental expenses such as

taxis, fees and tips. For more information on travel

expense deductions, check out the IRS site.

There are even more tax savings you may be eligible

for. Check out the IRS site for more information

on credits and deductions and Publication 463,

information on Travel, Entertainment, Gift, and Car

Expenses.

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14/15

HOW

ZENPAYROLL

CAN HELPThe end of year can be stressful. With ZenPayroll,

running payroll doesnt have to be. We make sure

your the end of payroll is easy. Thats why we

calculate, pay, and file your payroll tax filings for

you. We built our software with small business

owners in mind, because we know youre already

busy growing your business.

For more information on how ZenPayroll can help

you, check out the following resources:

ZenPayroll Blog: This is our ongoing corporate blog

that covers the latest small business best practices,

updated multiple times a week.

ZenPayroll Resources: Here are some of resources

to help businesses like yours with funding,

productivity, compliance, accounting, and more.

ZenPayroll Customers: See what other ZenPayroll

customers are doing to grow their business.

JOIN ZENPAYROLL TODAY

AND GET YOUR FIRST TWO MONTHS FREE

ZenPayroll has been a lifesaver. I dont have to

worry anymore and all my back office loads are

fixed with a push of a button thats special.

Tristan Walker, Bevel

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www.zenpayroll.com (800) 936-0383

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EOY Checklists

Documents

Transcript of EOY Checklists