December checklist, Quarter 4 and year end filings for businesses in the United States

If you’re enrolled in Wave Payroll's automated tax payment and filing service, take the steps provided in this guide before December 30 to ensure your filings are accurate. Payroll customers based in self-service tax states, or who have chosen to pay and file on their own, may find many of these steps helpful though not all will apply.

At a glance

Bring everything together with reconciliation
Make sure benefits enjoyed this year are included on 2023 payrolls
Reflect on business structure changes this year
Preview your W-2 forms
Review year-end direct deposit schedules
Audit your contractor information
Update employee tax profiles for 2024
Confirm your deposit frequency for 2024
Verify employer tax rates for 2023
Get your 2023 forms to the SSA, IRS, State/Local agencies, and to your workers

Bring everything together with reconciliation

If you pay your employees by check, perform a payroll bank reconciliation through December 31, 2023. Look for outstanding checks and make sure you've accounted for employee expense reimbursements. Compare state and federal payroll tax withdrawals from your bank account to the amounts on your tax liability records. To review payroll taxes in Wave, go to Payroll > Taxes For more steps and insight into year-end accounting, check out: Accounting year-end checklist

Make sure benefits enjoyed this year are included on 2023 payroll

If you are missing a benefit and have yet to run your final 2023 payroll, you will be able to add it to payroll before the end of the year. To do this, go to the employee profile > click Benefits & Deductions.

If you're missing a benefit and cannot add it to a future payroll in Wave, open Mave, Wave’s automated chatbot, and type missing benefits. Mave will help collect any relevant details and direct you to the appropriate support. Learn how to open Mave in Get support with Wave.

A reminder that December 29, 2023 is the last day for those enrolled in Tax Services to request adjustments to Form W-2 prior to SSA submission. Adjustments requested after this date will require a Form W-2C.

Reflect on business structure changes this year

If you made changes to your business structure in 2023 that resulted in a new EIN (e.g.  incorporating from a sole-proprietorship), you will need a set of year-end forms with your old EIN from before the business structure change and another set with the new EIN and wages paid after the change. You’ll need to create a second business in Wave for your restructured business. 

Preview your W-2 forms

Take advantage of previewing your W-2 forms now to make sure you’ve entered correct wages, benefits and employee information for 2023. Learn about common mistakes and how to fix them, and read more about new reporting requirements for 2023 in our guide here:

Review year-end direct deposit schedules

As 2023 comes to a close, it's important to keep direct deposit timelines in mind. Payrolls and direct deposits do not process on Federal bank holidays. This means if a bank holiday falls on the day you normally approve payroll, pay employees, or anytime in between, you must approve payroll at least one business day earlier. 

Federal Bank Holiday Date
Thanksgiving Thursday, November 23, 2023

Christmas Day (December 25, 2023) and New Year’s Day (January 1, 2024) both fall on a Monday. This means the holidays will impact direct deposit timelines in Wave.

December 22, 2023: The last day to approve a direct deposit payroll with a 2023 payday. Make sure that your payroll is approved no later than 3:30 PM Eastern on December 22, 2023 for the payroll to be reported in the 2023 tax year.

January 6, 2024: If you are enrolled in Tax Services and pay employees by check, this is the last day to approve a payroll with a 2023 pay day in Wave.

Audit your contractor information

In order for contractor payments to show up on Form 1099-NEC at year-end, the contractor must have been listed as a contractor in your Vendors list. If you need to update this, here's how:

  1. Under Purchases > Click Vendors
  2. Select the Vendor Name
  3. Click the arrow under Actions > Click Edit
  4. Under the vendor name > Select Type
  5. Update the vendor type to 1099 contractor > Click Save

Make sure to review and confirm all contractor Tax Identification Numbers (TIN). If your Vendor is an Individual, ensure that their Social Security Number (SSN) is correct, and that their name matches what is on their SSN card. If your Vendor is a Business, ensure their Employer Identification Number (EIN) and Business Legal Name are correct.

Review contractor bills and bill payments

January 2024: 1099-NEC Forms will be available to generate in Wave

January 24, 2024: This is the deadline to e-File 1099-NEC forms with Wave, to ensure timely filing with the IRS. After this date, you can still e-File with Wave, however, late fees from the IRS may apply. 

If you paid contractors outside of Wave in 2023, make sure you have created bills in Wave and recorded manual payments. This will ensure these contractor payments are reported on the 1099-NEC. 

If you paid your contractor less than $600 in 2023, you are not required to file a Form 1099-NEC.

Update employee tax profiles for 2024

January 1, 2024: If any employees are updating their withholding for 2024, ensure that they fill out the new W-4 Employee Withholding Certificate issued by the Internal Revenue Service (IRS), as well as a new state W-4 if applicable.

Confirm your deposit frequency for 2024

December 2023: Review your lookback period for IRS withholding to ensure you have the correct deposit frequency heading into January 2024.

If you are a 941 filer (quarterly), your lookback period is July 1, 2022 - June 30th, 2023. If you have been a 944 (annual) filer for the current year, or in the past two years, your lookback period is the 2021 calendar year. Regardless of your filing status, if you have reported $50,000 or less of taxes for the lookback period, you are a monthly depositor. If you have reported more than $50,000 in the lookback period, you are a semiweekly depositor.

The IRS and/or State agencies may send you a notice before the end of 2023 regarding tax deposit/filing frequencies. If you receive a notice or have changes due to your lookback period, update those details in Wave to ensure you don’t miss payment deadlines in 2024. Do this as early as possible - you can make the effective date January 1st, 2024. Learn how to update your deposit or filing frequency.

Verify employer tax rates for 2024

November 2023: State agencies will begin to issue 2024 Unemployment Tax Rates. If applicable, update your tax rate in Wave from Settings > Tax Profile to ensure taxes will be calculated correctly for next year.

Get your 2023 forms to the SSA, IRS, State/Local agencies, and to your workers

January 31, 2024: This is the last day to file Forms W-3/2 with the Social Security Administration (SSA), and Form(s) 1099-NEC with the IRS. This is also the last day to get these forms to your employees and contractors.

For specific due dates and filing guidelines for State and Local agencies (where applicable), consult those tax departments directly.