As the leaves fall and stores begin playing holiday music, our minds quickly transition to payroll and bookkeeping year-end processes. Ok, so maybe that’s not quite how it goes. But, we’re here to help you finalize 2020, prepare for the upcoming tax season, and successfully kick off the new year.
Here are several processes to consider prior to your holiday break…
Medical Insurance for S-Corporations
The IRS allows S-Corporations to pay health and accident insurance for 2% stakeholders. However, these premiums must be treated as income for the stakeholder. Please update your payroll provider of any employees meeting this criterion. You will need to enter this information prior to December 31, 2020 for it to be included on the W-2. For more details on this tax law, please click here.
Business owners must issue a 1099 for each person they paid at least $600 in rent, services, prizes and awards, or other income payments. Prior to December 31, you will want to confirm the recipient’s name, tax identification number, street address and email address. 1099s must be submitted to the IRS by January 31, 2021, and may be filed either electronically or by mail. To read more tips about the 1099 process, please click here.
Prior to December 31, you will want to confirm the payroll information for all employees. Verify the spelling of names, social security number, street address and email address. You also need to ensure that all bonuses and wages are processed. If there are any corrections needed, please notify your payroll provider. This will ensure that employees receive correct W-2s in a timely fashion.
Unemployment Tax Rate Changes
Each year, the Department of Workforce Development (DWD) adjusts the unemployment rate for businesses. You will receive a letter from the DWD defining the new rate. Please send a copy of the notice to your payroll provider to update their system.
The Indiana Department of Revenue has launched a new online portal called INTIME (Indiana Taxpayer Information Management Engine) for customers to manage sales tax, withholdings and corporate income tax. This portal replaces the INTAX system you may be familiar with. If you have not already migrated your INTAX account to INTIME, you need to do so ASAP. INTAX will only be available until February 28, 2021, before the site is shut down.
Although this seems like a lot to get done by the end of the year, don’t stress. We can help you with all of this and more. Please reach out to our Business Services Team today. We’ll get you back to raking leaves and listening to holiday music in no time!
Blog by Erika Lewis – Bookkeeping and Payroll Administrator
Learn more about Erika and the rest of the Storen Financial team here.