Calendar Year End Tasks – Don’t Miss Important Deadlines!
by Karin M. Smith, MBA, SFO, CFE, Consulting Partner
Posted on December 15, 2016
The holiday season gives us an opportunity to spend time with family and friends and make memories. It is also a reminder of the 2016 calendar changing over to a new year. With the calendar changing there are several calendar year end tasks that can’t be missed. Here are a few items to make sure are on your other list, and make sure to check them twice because you may be on the naughty list if they don’t get done!
- Issue W-2s – The W-2 is the form that an employer must send to an employee and the internal Revenue Service for each calendar year. The W-2 form reports the employee’s annual wages and the amount of taxes withheld from his or her paycheck. This must be issued to the employee by January 31. It must also be sent to the IRS by January 31. This date is different from previous years, so don’t miss the deadline. The W-2s must also be sent to Arizona Department of Revenue.
- Issue 1099-MISC – The 1099-MISC is the form used to report miscellaneous income. Common recipients include independent contractors, attorneys and medical providers. This must be issued to the vendor by January 31. It must also be sent to the IRS by January 31. This date is different from previous years, so don’t miss the deadline. The 1099-MISC must also be sent to Arizona Department of Revenue.
- Update Federal Tax Tables – Every year the federal tax tables are updated in the IRS Circular E. These tables must be updated in your payroll system before processing your first payroll of 2017. The IRS Circular E is typically released the last week of December. Keep an eye out for it!
- Update Social Security Cap – The IRS Circular E also provides the maximum deductions for social security each year. The 2016 limit was $118,500 meaning we cannot deduct more than $7,347 from employee wages. The Social Security Administration has announced that this amount will increase to $127,200 in calendar year 2017 so the maximum deduction needs to increase to $7,786.40.
- Minimum Wage – Arizona minimum wage will increase to $10 per hour effective January 1. It is important that prior to this date, your organization carefully examines all hourly rates to ensure no one is paid less than $10 per hour.
- Updated W-4/A-4s – If you have any employees who claim ‘exempt’ on their W-4/A-4, don’t forget those exemptions expire on February 15, 2017 so it is important to obtain updated withholding certificates prior to that date.
Be sure to complete these tasks. Fees and penalties will surely ruin any holiday cheer!