15 Nov Payroll Steps to Take Now for a Smooth 2017 Year End
Dear Client, 2017 is quickly coming to a close. We would like to take the time to thank you for your continued support and for choosing Payroll Partners to service your workforce management needs throughout the year. We look forward to a stronger relationship with you in 2018!
Please take a moment to review the enclosed information and deadlines to help us ensure 2017 Year End reporting is a smooth success. If you have any questions, or need additional information, please feel free to contact us at 817-226-8111. Complete your 2017 year end survey by December 1st. and you will be entered into a $50.00 gift card raffle!
Dates to Remember and Holiday Closings
Due to the reduced schedule and increased volume during the holidays, please submit all payrolls as early as possible. Due to the limited time constraints we may not be able to send a preprocess report to you for review.
Please keep in mind that when a holiday falls on a weekend, the “observed” holiday may be the business day before or after the holiday. Banks will be closed and direct deposits will not be processed/paid on the “observed” day. If your normal pay day is Friday, you will need to back up your processing day by one business day.
For example, if you normally submit your payroll on Wednesday, you would need to submit your payroll on Tuesday that week instead. Tuesday processing would need to be done Monday instead. Please watch your check dates!
Any 2017 payrolls submitted after 12/29/2017 may be subject to an IRS tax penalty for late payments or additional year end reprocessing fees
2018 Federal Tax Limits
Social Security Tax Wage Base $128,700.00
Maximum Social Security Tax (6.2%) $7,979.40
Medicare Tax Rate 1.45%
Medicare Surtax Rate for Earnings Over $200K 0.9%
Federal Unemployment Wage Base (0.6%) $7,000.00
401k and 403B Retirement Plans $18,500.00
401k and 403B Over 50 Catch Up Contribution $ 6,000.00
Simple IRA Deferral $12,500.00
Simple IRA Over 50 Catch Up Contribution $ 3,000.00
NOTE: Catch Up Contributions for employees age 50 or over need to be set up as a separate deduction code. The annual limit will be automatically applied to both regular and catch up contributions separately.
2017 Year End Survey
In our continuing efforts to “go green” and streamline our processes, we are utilizing Survey Monkey to obtain year end authorization data. Please click here to complete our survey. This information will only be used for our year end planning and will not be sold to other parties. Complete your 2017 year end survey by December 1st. and you will be entered into a $50.00 gift card raffle!
2018 Payroll Calendars
Our 2018 Payroll Calendars are very popular and have come in! Please let us know if you would like us to include additional calendars with your December payrolls.
2018 State Unemployment Insurance (SUI) Tax Rate Changes
You should receive notification of your new SUI tax rate for 2018 during the month of December. We need this rate to calculate your 2018 SUI tax and SUI expense correctly. Please email a copy of the document you receive from your state unemployment insurance agency with your client number noted before December 29, 2017 to firstname.lastname@example.org.
W-2/1099 Information Review
Be sure all names, social security numbers (SSN) and addresses are reviewed to ensure the 2017 W-2s & 1099s are processed accurately. You should receive a W-2/1099 Edit report with your last payroll processed in November. Please be sure to update/provide any changes needed prior to processing your final 2017 payroll.
Please keep in mind social security numbers or name changes may require amendments to previously filed quarterly tax returns. If your contractor provides an employer identification number (EIN), please be sure we have the corresponding legal name setup to prevent any discrepancies.
You will also receive a W-2/1099 Preview report with your processed payroll around mid December. This report shows the year-to-date wages/taxes that will be included on the W-2/1099s. Please be sure to review and contact us to discuss any corrections.
1099 Annual Reporting Only
If Payroll Partners is processing 1099s for your independent contractors, and their payments are not entered in Evolution Payroll yet, we need to receive a list of independent contractors with SSNs/EINs and total amounts paid to each contractor for the year prior to December 22, 2017. Be sure to ask your independent contractors to review and confirm their 1099 information before the end of the year.
Provide Payroll Partners with any updated independent contractor 1099 information prior to the last payroll processed in 2017. No additional 1099 payrolls will be processed after 12/22/2017 or your last payroll (whichever is earlier)!
Please remember: if you enter 1099 information for your independent contractors in Evolution Payroll, please let us know PRIOR to entering payment information so we can verify the appropriate taxation. Once we do that, make sure 1099 contractors are paid using the 1099 Earnings Code set up for your company.
Year End Employee Bonus Information
If you are planning to issue year-end bonuses to employees, please complete the required Bonus Payroll Worksheet request as soon as possible to schedule this additional run. This can be done in conjunction with a regular payroll on a separate check or on a separate check run. Keep in mind that a separate check run or payroll that needs to be grossed up is an ADDITIONAL FEE.
According to the IRS, any compensation regardless of amount is taxable. Please complete your form, scan and email your request and payroll information to email@example.com at least one week before the bonus run check date for grossed up checks.
New or Changed Ordained Employees or 1099 Contractors
Help us keep your taxation reporting correct by letting Payroll Partners know if you set up or change an ordained employee or 1099 contractor. You can send us an email or send your payroll in on S/B Review and we will verify the correct taxation prior to running your next payroll.
Changing Employee Taxation
If you have an employee switch taxation (i.e. employee to clergy, 1099 to employee, etc…) during the year, you need to terminate his/her old record and create a new record on which to reflect the new taxation. Continuing with the same record will cause delays in the preparation of W-2s for that employee at the end of the year.
Exempt W-4 Forms
All employees that claimed “Exempt” from federal income taxes on the W-4 form must complete a new W-4 form every year. All employees should complete a 2018 W-4 form no later than February 15, 2018. If they do not give you a new W4, you should change them to single with zero exemptions. Once the 2018 W4 form is available from the IRS, we will make it available on our website.
Important Information About W-2 and 1099 Forms
Employee W-2 and 1099 forms are scheduled to be delivered to you no later than mid-January. Due to timing this year, your W-2s and 1099s may be sent separately from your payroll dated 01/12/2018. We strive to have all W-2s delivered as soon as possible. Your employee online W-2 copy will be available no later than Monday, 01/29/2018.
W-2s must be handed out or postmarked by January 31, 2018. ALL filings with IRS, SSA and most state agencies are also required by the 31st. Please have all information to us before your last payroll of 2017 is processed. We will be sending the file to print W-2s on or before the morning of January 3, 2018. The W-2s may not be back in time for you to receive them with the payrolls of January 12th as in previous years. They will be sent out the week of Jan 16th.
Any changes to W-2s or corrections to payrolls will have to be done as amendments and W-2Cs. Any changes or corrections will also delay the W-2s getting to you which would impact your employees. In light of the above circumstances, any reprints of W-2s or corrections to W-2s will not be done until after February 1, 2018.
Charges for W-2s and 1099s will be billed on the last payroll of January.
Base Fee for W-2s: $35.00 + per item charge:
1 – 50 W-2s: $5.55 ea.
Over 50: $5.35 ea.
Base Fee for 1099s: $35.00 + per item charge:
1 – 50 1099s: $5.55 ea.
Over 50: $5.35 ea.
Affordable Care Act/Obamacare (ACA)
An information return needs to be prepared for each applicable employee, and these returns must be filed with the IRS using a single transmittal form (Form 1095-C & 1094-C). These forms must be distributed to employees by January 31, 2018*.
We believe we have reached out to clients that must comply with the requirements of ACA reporting. If we have not contacted you and you may be subject to ACA reporting due to one of the reasons below, please contact us immediately.
- The company is part of a larger control group
- The company has 50 or more full-time employee equivalents
- The existing health insurance provided to employees is Self-Insured
Base Fee for 1095-Cs: $45.00 + $6.95 per item charge
Filing Fee for 1094-C: $35.00
**Deadline to have all 1095-C information for processing is 12/22/2017
*In prior years, the 1095-C deadline to deliver forms to employees was extended to 3/31. At the time of publishing this article, the IRS has not granted an extension
Don’t forget to complete your 2017 year end survey by December 1st. to be entered into a $50.00 gift card raffle! Please call us toll free at 1-866-757-8111 with any questions or comments regarding this year end information. We are available Monday to Thursday from 8AM-5PM and Fridays from 8AM-4:30PM Central Standard Time.