As the year draws to an end, we would like to highlight a few tasks that employers may perform in December and January to make the year-end payroll processing go more smoothly.

•    Remind workers to update their withholding on Form W-4 if they have undergone life changes, for example, marriage, divorce, or a change in the number of dependents.
•    Remind employees that if they wish to continue claiming exemption from withholding during 2012, a new Form W-4 must be filed by February 15, 2012.  After this date, any employees who have not filed a new Form W-4 and had been claiming exemption from withholding in 2011 must begin withholding based on a “single” marital status with zero withholding allowances.
•    Run a special payroll, if necessary, to record all manual and voided checks issued between the last regular payroll and December 31st.
•    Collect benefit and payroll adjustment information and post to the employees’ payroll records.
•    Order enough W-2 forms for all the employees who have worked for you this year, as well as some extra to allow for any mistakes.
•    Verify employees’ names and Social Security Numbers (SSNs) at http://www.ssa.gov/employer/ssnv.htm
•    Review the general ledger for any hidden wages (ex. taxable noncash fringe benefits).
•    Verify that a bank reconciliation has been performed for November and request that the bank prepare an early cutoff statement for December.
•    Make sure the payroll system will be updated by January 1st to account for any changes in the federal tax-free limitation and state unemployment taxable wage bases
•    Order 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.  This may help reduce the number of questions from employees in the upcoming months.