2018 Year-End Payroll To Do List

 In payroll taxes

payroll-checklistPayroll is an integral component and the backbone of most businesses.  An organization’s payroll team and department have a critical role in the protection of a company’s integrity, reputation and compliance record; this is on top of managing employee compensation. This year, there is more to consider after the passage of the tax-code overhaul (Pub L. 115-97). Significant provisions affecting payroll remain to be implemented. A thorough, robust and efficient payroll team reflects an organization’s commitment to its vision. Overlooking the importance of this department would be a travesty. Hence, it is beyond important to focus on the functions of the payroll team, especially in light of the Tax Cuts and Jobs Act (TCJA.) In addition to these tax law changes, there are the regular requirements related to gathering, verifying and reconciling data and meeting deadlines. Payroll mistakes may be costly in terms of penalties and interest, and lost time. At Thomas Huckabee, CPA of San Diego, California, we have compiled a chronological document of items that must be considered when closing the year and into 2019. Take a look:   


Review Current-year Employee W-2 Forms with:

  • A business-wide mock running of W-2 Forms with third quarter data. Confirm that:

— All bank reconciliations are readily accessible in real-time

— Social Security numbers are confirmed and not truncated

— No employees have negative amounts in any W-2 Form fields

— Total earnings on mock exercise reconcile exactly with Form 941

  • Confirmation that the Earned Income Credit statement is properly and prominently displayed on employee versions

Form Year-end Committee Consisting of All Cost Centers and Departments Even Remotely Involved in Year-End Closure:

  • Hold year-end committee meeting, including representatives from service providers

— With regards to payroll, review:

-Previous year issues

-Current year issues

-Anticipated issues

-Possible or definite policy alterations

-Calendar and important milestones that should be noted



  • Convene with Accounts Payable to discuss taxable items that are not yet in the company’s payroll system. These are generally payments and noncash items; they must be processed in November and December
  • Gather 2019 data, such as:

—Threshold amounts

—Social Security wage base

—Deferral limits

  • Collect facts, like income amounts, and make sure that they are input properly into the payroll system in November and December.  This especially pertains to noncash fringes if your company is to remain in compliance with the Special Accounting Rule
  • Determine, create, and schedule any one-off or ad hoc year-end reports
  • Send a reminder to company employees to verify their filing status on their W-4 Forms
  • Brainstorm and confirm a method for the oversight of state unemployment insurance (UI); be on the lookout for accurate dollar figures and ways to reduce costs



  • Check if all estimated tax deposits for adjusted payrolls have been made and put into the system
  • Confirm with company service providers that they have been informed of any state unemployment experience legislation
  • Inform employees on statutes and requirements needed to claim “exempt” tax withholding status for the following year
  • Run a test on algorithm calculations created using the first payroll period of January of the following year

Convene & Collaborate with:

  • Human Resources & Benefits Department:

—Test business-wide accuracy of W-2 Forms and Code DD (health care insurance) amounts

—Recalculate deductions for new compensation and benefit amounts

—Obtain updated, altered or new data on 2019 policies

  • Accounts Payable: Request information on any new taxable payments since last meeting
  • Information Technology: Confirm implementation all any new tax updates
  • Third Party Providers: Confirm implementation all any new tax updates



  • Confirm that all bank reconciliations concerning payroll bank accounts are updated
  • Confirm that late December information, especially all federal, state, and local tax returns are in sync with tax reports and consistent reconciliations

File & Remit:

  • W-2 Forms, or equivalents, to employees by due date
  • Fourth-quarter Form 941 according to schedule
  • Annual Form 940, which is on track with schedule predicted in fourth-quarter Form 941

Confirm W-2 Form Employee Distribution Methodology:

  • With those employees who file electronically, make sure a signed letter of acceptance is on file and notify them of a secure site where they can access pertinent documents

— Ensure notification to employees of special state notification of the Earned Income Credit concerning W-2 filing is adhered to for CA, IL, LA, MD, NJ, TX and VA

  • With any and all service providers given the task of distributing and filing business forms

Communication with Employees:

  • Availability of W-4 Forms for new hires and existing employees who need to make changes for the calendar year 2019
  • All Social Security wage bases, tax rates, withholding thresholds, 401(k) limits



  • Make sure that service providers have filed all their returns by designated deadlines
  • Remit fourth-quarter Form 941 and/or annual Form 940 by February 11, 2019


Year-end Closure and Follow-up Meeting:

  • Discuss:

—What went well?  Where were your successes?

—What went wrong? Where were your failures?

—What went unresolved? Where are your outstanding issues?  

—What could be some improvements?

  • Highlight the findings from your discussion and document those takeaways so the next year-end is near seamless

Respective State Unemployment Insurance Issues:

  • If your company employed the services of a service provider, verify that that company is well-aware and clearly informed of any unemployment insurance state experience notices
  • Confirm that proper and new, if applicable, wage bases and rates are updated and included in payroll system

Celebrate Year-end and Start All Over Again


Thomas Huckabee, CPA of San Diego, California recognizes that many options exist when it comes to choosing the right CPA. And, the right CPA is essential and needed to guide your business and you through the payroll process, from start to finish.  Operating a full-service accounting firm, Tom guides clients through the complicated process of payroll and how the TCJA and its ramifications affect your business.


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