As spring turns to summer, another payroll quarter is ending. Here are items to check off your to-do list.
- Confirm your federal tax deposits. Do you outsource the preparation of any portion of your payroll? Remember that you’re responsible for timely filing and paying, even if a payroll provider is performing those actions for you. Access the free, on-line Electronic Federal Tax Payment System to make sure federal deposits are being made in a timely manner.
- Review severance payments to former employees. In general, severance pay is subject to federal and state withholding, as well as social security and Medicare tax. If you neglected to withhold these taxes in the past, you will need to file amended payroll returns. Update your company payroll policies to reflect the proper method going forward.
- Make prior quarter corrections on the right form. Use the latest version of Form 941X (revised April 2014) to correct errors on a previously filed Form 941. Note that Form 941X is appropriate only for certain corrections and that you may have to file other forms as well.
- Make sure your 401(k) is current. Federal laws for maintaining your plan’s tax exempt status change and your plan documents need to keep up. Be sure to adopt required amendments. This is also a good time to investigate implementing non-mandatory features to add benefits such as the option to allow your plan to accept Roth contributions.
Please contact us for the latest developments in payroll rules. We’re here to keep you up to date.