December
Remind workers who have had life changes, such as marriage, divorce, or a change in the number of dependents, to make the appropriate changes to their withholding on Form W-4.
Remind employees who wish to continue claiming exemption from withholding to submit a new Form W-4 by Feb. 15, 2012. Beginning Feb. 16, 2012, you must withhold based on a marital status of “single” with zero withholding allowances for employees who claimed exemption from withholding in 2011, but who have not submitted a 2012 Form W-4.
Collect benefit and payroll adjustment information and post to employees' payroll records. This information should include relocation, educational assistance, group-term life insurance, third-party sick pay, company cars, manual checks, and void checks.
Order enough W-2 forms for all the employees who have worked for you this year, as well as some extras to allow for any mistakes. Consider preparing, printing, and filing W-2s online at the Social Security Administration (SSA) website, if you don't do this already.
Verify employees' names and Social Security Numbers (SSNs) at http://www.ssa.gov/employer/ssnv.htm.
Run a special payroll, if necessary, to record all manual and voided checks issued between the last regular payroll and December 31st.
Conduct a final review of the general ledger for hidden wages (generally, taxable noncash fringe benefits).
Make sure your payroll system will be updated by January 1 to take into account any changes in federal tax-free limitations and state unemployment taxable wage bases.
December-January
Obtain new forms, withholding tables, and publications. Review the new Social Security wage base, deferred compensation limits, mileage rates, and state unemployment wage bases.
Let employees know about changes to tax figures. The above communications may help reduce the number of questions that you receive from employees in the coming months.
January 1
Reset all year-to-date balances to zero.
Reset all wage bases, rates, and taxable limits.
