New Year Payroll Checklist: Are You Ready?
2022 is here—a bright and shiny new year for your business, and the last thing you want to do is dig back into documents from 2021 and review your payroll. That's why we've created this convenient checklist that you can reference to stay ready and compliant - no matter who your payroll provider is.
2022 Payroll Guidelines
If you’re paying independent contractors, there are some critical steps you need to take to get your business and team in good shape for the new year.
Important Dates for U.S. Payroll Tax Season
January: Form 1099-NEC and W-2 forms will be available through your payroll provider or your accounting team.
January 31st: Final date to submit your W-2 and 1099 tax forms to federal and state agencies if applicable, as well as provide copies to your employees and contractors.
Hints and Tricks for New Year Payroll
Check and Update Payroll
Paychecks should reflect any new tax rate changes (look for snail mail), withholding allowances, and any other deductions employee have elected. Make sure to review all checks thoroughly before they are distributed or sent via direct deposit.
Update W-2 Forms
Make sure you update all employee W-2 forms as you will need to file copies with the state and local government by January 31.
Pay Your Federal Taxes
By the end of January, you'll need to pay any outstanding Federal Unemployment Tax Act taxes and submit a 940 form to the IRS. All taxes paid to go towards funding any unemployment compensation to state residents who have lost their jobs.
Confirm your 2022 Deposit Frequency
Deposit requirements can change each year, so make sure you have the correct frequency for your business, so you don't miss any deadlines. Review past IRS withholdings to ensure you have the correct deposit frequency for 2022.
A 941 form is what most employers use, as it reports your company's quarterly federal tax returns and reviews employee compensation. If your company is very small ( under five employees), you may file a 944 form instead and pay annual taxes rather than quarterly. No matter which forms you file, it is due to the IRS by January 31.
Verify All Form 1099-NEC
Form 1099s are proof that your company paid contracted employees over the year (over $600.) These forms are distributed to your contracted employees, and copies need to be sent to the IRS by January 31.
Update Employer Information
If you have made any changes to your business structure in the past year like incorporating from a sole-proprietorship, you'll need to have two Employer Identification Numbers. This means you will need a set of 2021 forms with your old EIN before the updated structure and another with the new EIN and all wages paid after the change.
Boom! You’re Ready for 2022
Basis 365 makes it easy to follow compliance requirements by working with customers to automate the payroll process. With a little guidance, your payroll and tax prep for 2022 will be a sinch.
