Payroll year-end checklist

With 2019 coming to an end, we've got some steps with important dates to help you finish the year off, and head into the new year on a strong note. 

At any point, if you have questions or aren’t sure about your forms, please contact Support with as much detail as possible.

U.S.

Step 1: Review your workers’ wages, benefits, and personal information

November 14, 2019: your Form W-2 previews will be available! This is the best time to review your year-to-date entries to ensure everything is correct so far this year. A few things to consider:

  • Are all employees paid within 2019 reported (even from before Wave)?
  • Are all wages reported accurately?
  • Are all benefits reported accurately?

Common W-2 errors:

  • Incorrect Social Security Numbers (SSN)
  • Incorrect Addresses 
  • Incorrect Names - keep in mind that the employee name must match what is on their SSN card
  • Incorrect Benefit Codes (Box 10,12)

For more information on the benefit features in Wave, here are some resources: 

If you notice anything missing or incorrect on your previews, you may be able to correct these errors from within your account. 

For corrections including employee names, addresses, and SSNs, you can correct this information from within the employee's profile. Go to the Payroll menu and then to Employees:

  1. Choose the name of the employee
  2. Personal information

If you are missing a benefit, and have yet to run your final 2019 payroll, you will be able to add this in before the end of the year. If you are still in the employee profile from the above steps, you can then go to Benefits & Deductions

Otherwise, please reach out to Support as soon as possible with details on what needs changing, and the name of the employee(s) for whom the change is needed.
Once any changes have been made, you will be able to Discard and Start Over to view updated previews of your forms.

January 7, 2020 (Automated Payroll Tax Payment & Filing Customers): last day for requesting adjustments on the Form W-2 prior to SSA submission. Adjustments requested after this date will require a Form W-2C.


Step 2: Reflect on any business structure changes this year

If you have made any changes to your business structure throughout the year which resulted in a new EIN (like 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. 


Step 3: Review Important Direct Deposit Dates

Keep in mind direct deposit timelines and take into consideration Federal bank holidays that will cause delays in depositing funds as you approve Payroll closer to these dates:

  • Thanksgiving - November 28, 2019Direct Deposit delayed by an entire day.
    • For example, if you like to have your pay dates on the last day of the month, you will have to approve your payroll by Monday, November 25th, 2019 to ensure the funds land in your employees’ accounts by November 30th.
  • Christmas Day & New Year’s Day - December 25, 2019, and January 1, 2020: Each of these days will delay Direct Deposit by an entire day. 
  • December 26, 2019: Last possible day to approve a direct deposit payroll with a 2019 pay date. Please note that payroll must be approved before 3:30 PM Eastern on December 26, 2019 to avoid writing checks for your employees. The pay date must be recorded with a 2019 pay date for it to be reported for the 2019 tax year. This includes year-end bonuses for your employees.
  • January 6, 2020 (Automated Payroll Tax Payment & Filing Customers): If you are paying your employee via check, this is the last day to approve a payroll with a 2019 pay date within Wave.

Step 4: Audit your contractor bills

In order for contractor payments to show up on Form 1099-MISC at year-end, the contractor must have been listed as a 1099 contractor in your Vendors list. If you need to change this, go to the Purchases menu on the left-hand side: 

  1. Click Vendors
  2. Click the name of the Vendor
  3. Click the down arrow under Actions
  4. Click Edit
  5. You will then see the option to change the Type under your vendor’s name.

Verify your Vendor information to ensure you have accurate 1099-MISC Forms. When viewing your Vendors, verify that their Tax Identification Number (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 that their Employer Identification Number (EIN) and Business Legal Name is correct. 

In addition, the bills must have been paid in 2019 through direct deposit, or marked as paid via check, bank transfer, or cash to populate on the 2019 Form 1099-MISC. If you have a 1099 contractor for whom you have paid via credit card, PayPal or any other payment processing software, they will receive a Form 1099-K directly instead (if eligible). You are not responsible for providing or filing Form 1099-K if your contractor falls into this category. If you paid your contractor less than $600 in 2019, you are not required to file a Form 1099-MISC.

Please note when paying contractors via Direct Deposit: to have your 1099 contractor bills appear on Form 1099-MISC, you must have Account Mapping set up. This can be found under Settings in the left-hand side menu.

1099-MISC Forms will be available to generate in Wave by January of 2020


Step 5: Update employee tax profiles for 2020

January 1, 2020: If any employees are updating their withholding for 2020, please ensure that they fill out the new Withholding Certificate issued by the Internal Revenue Service (IRS), as well as a new state W-4 if applicable. For more information on the 2020 IRS updates on the previously named Form W-4 please see: 


Step 6: Bring everything together with reconciliation

If you pay your employees by check, perform a payroll bank reconciliation through December 31, 2019—including identifying outstanding checks. Compare state and federal payroll tax withdrawals from your bank account to the amounts on your tax liability records - you can also look on your Taxes page under the Payroll menu. Ensure that you’ve accounted for any employee expense reimbursements from the year. For more steps and insight on your accounting year-end, head on over to: 


Step 7: Confirm your deposit frequency for 2020

December 2019: Review your lookback period for IRS withholding to ensure you have the correct deposit frequency heading into January 2020.
If you are a 941 filer (quarterly) your lookback period is July 1, 2018 - June 30th, 2019. If you have been a 944 (annual) filer for the current year, or in the past two years, your lookback period is the 2017 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.

Additionally, the IRS and/or State agencies may have sent you a notice before the end of 2019 regarding any tax deposit/filing frequencies.

If you have received any notices, or have any changes due to your lookback period, please update your Tax Profile (found under Settings) to ensure you don’t miss any payment deadlines in 2020. Please do this as soon as possible - you can make the effective date January 1st, 2020.


Step 8: Verify employer tax rates for 2020

November 2019: State agencies will start issuing next years Unemployment Tax Rates in November please keep an eye out for notices from the states you are operating in surrounding your tax rates for 2020. If applicable please update your tax rate in your Tax Profile (found under Settings) to ensure taxes will be calculated correctly for next year, as you don’t want to make any over- or underpayments!


Step 9: Get your forms to the SSA, State/County agencies, and to your workers

January 31, 2020: This is the last day to file your Forms W-3/2s and 1099-MISC forms with the Social Security Administration (SSA). This is also the last day to get these forms to your employee(s) and/or contractor(s).

For specific due dates and filing guidelines for your State and County (if applicable), please reach out to those individual tax departments for further insight.

Canada

Step 1: Review your 2019 workers’ wages, benefits, and personal information

Mid-November: Review your Payroll Tax & Wage Report for 2019! This is the best time to review your year-to-date entries to ensure everything is correct.
You can find this report under Reports on the left-hand side menu near the bottom.

Some things to consider:

  • Are all employees paid within 2019 recorded (even from before Wave)?
  • Are all wages reported accurately?
  • Are all Social Insurance Numbers accurate?
  • Do all employees who are eligible for Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums have deductions in that section of the Report?
    • Keep in mind that the 2019 maximum employee contribution for CPP is $2,748.90 and 2019 maximum employee premium for EI is $860.22.

Step 2: Reflect on any business structure changes this year

If you have made any changes to your business structure throughout the year which resulted in a new Canada Revenue Agency (CRA) Payroll Account Number (like incorporating from a sole-proprietorship), you would have already submitted your T4 slips with the old CRA Payroll Account number when the change occurred. Ensure that the wages reflected on your year-end forms only include wages that were paid under your new CRA Payroll Account Number. 


Step 3: Review Important Direct Deposit Dates

Keep in mind direct deposit timelines and take into consideration Federal bank holidays that will cause delays in depositing funds:

Christmas and Boxing Day, December 25 and December 26, 2019: Each of these days will delay Direct Deposit by an entire day.

December 24, 2019: Last possible day to approve a direct deposit payroll with a 2019 pay date. This must be approved before 3:00 PM Eastern on December 24, 2019 to avoid writing cheques for your employees. The pay date must be recorded with a 2019 pay date for it to be reported for the 2019 tax year. This includes year-end bonuses for your employees.

New Year’s Day, January 1, 2020: Direct Deposit delayed by an entire day. Any payroll approved with a 2020 cheque date will be counted toward the 2020 tax year.


Step 4: T4A considerations

Make sure any T4A contractors are listed as such in your Wave account. If you need to update any contractors to fall under the T4A category, go to the Purchases menu on the left-hand side:

  1. Click Vendors
  2. Click the name of the Vendor
  3. Click the down arrow under Actions
  4. Click Edit
  5. You will then see the option to change the Type under your vendor’s name.

Ensure that these T4A Vendor bills are marked as paid within 2019 to have the amounts appear on your 2019 T4A slips. Payments made to a T4A contractor totalling $500 or more in the year require a T4A slip. 

Verify your Vendor information to ensure you have accurate T4A slips. If your Vendor is an Individual, ensure that their Social Insurance Number (SIN) is correct. If your Vendor is a Business, ensure that their CRA Account Number and Business Legal Name is correct. 

Please keep in mind that if you are a Construction company paying subcontractors for construction services, you will have to file Form T5018 Statement of Contract Payments instead of a T4A slip.

In order to have your T4A contractor bills appear on the T4A slip, you must have Account Mapping set up. This can be found under Settings in the left-hand side menu.

T4A slips will be available to generate in Wave by February 1, 2020.


Step 5: Update employee tax profiles for 2020

January 1, 2020: Time to update your employees’ Federal and Provincial TD1 forms! If any claim amounts have changed for your any of your employees, they must submit new forms. Otherwise, make sure your numbers are up to date with the changed basic exemption amounts for both Federal and Provincial income tax for 2020.
This can be updated by going under the Payroll menu and choosing Employees.

  1. Choose an individual Employee Name
  2. Go to Tax Details

Step 6: Bring everything together with reconciliation

If you pay your employees by check, perform a payroll bank reconciliation through December 31, 2019—including identifying outstanding checks. Compare Federal and Provincial payroll tax withdrawals from your bank account to the amounts on your remittance records - you can also look on your Taxes page found under the Payroll menu. Also ensure that you’ve accounted for any employee expense reimbursements from the year. For more steps and insight on your accounting year-end, head on over to: 


Step 7: Confirm your deposit frequency for 2020

December 2019: Review any notices received before the end of 2019 from the Canadian Revenue Agency (CRA) regarding any changes to your remittance deposit frequency. If you have, please update your Tax Profile (found under Settings) to ensure there are no late remittance payments for 2020.
Please do this as soon as possible - you can make the effective date January 1, 2020.


Step 8: Get your forms to the CRA and to your workers - Key dates

January 7, 2020: Internet filing becomes available for your T4 summaries and T4/T4A slips to be submitted to the CRA.
February 29, 2020: This is the last day to get your T4 and T4A slips to your employee(s) and/or contractor(s). This falls on a Saturday - so if you don’t see your employees on the weekend, you should give them their forms beforehand.
March 2, 2020: This is the absolute last day to submit T4 summaries and T4/T4A slips to the CRA. Because February 29th falls on a Saturday, the last filing date is moved to the business day immediately following the deadline.

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