Payroll Processes for Efficient Year-End Adjustments
Dec 18, 2023As we approach the end of the year, it's crucial to ensure that payroll processes are efficiently managed and accurately reflected in your clients' books. Making year-end adjustments can save you time and effort in the long run, preventing potential discrepancies or errors. In this blog post, we'll discuss key tasks and considerations for streamlining payroll processes, particularly for clients with LLC or S-corp entities, and address the importance of understanding entity types and tax implications.
Distributions or Wages
One essential aspect of managing client payroll is establishing a clear and accurate chart of accounts. For clients with LLC or S-corp entities, properly setting up accounts for distributions, owner's wages, and health insurance is essential. This may involve sub-accounting and mapping to ensure that the owner's salaries and benefits are tracked separately and accurately reflected on the W-2 forms.
When onboarding new clients or reviewing existing ones, requesting their tax returns to validate their entity type (e.g., S-corp, partnership) and determining whether they operate on a cash or accrual basis is beneficial. This information is crucial for aligning the books with the tax returns and addressing discrepancies, such as unreported expenses or fringe benefits.
New Features in QuickBooks Online Payroll
QuickBooks Online Payroll can significantly streamline the payroll process, especially when managing fringe benefits, bonus checks, and taxable benefits. The platform offers features for running taxable checks for fringe benefits, editing W-2 boxes, and efficiently managing tax filings. Additionally, leveraging the benefits programs and guidelines within QuickBooks Online Payroll can automate and simplify various payroll-related tasks.
Officer 401k or Health Benefits
Another vital consideration is ensuring that all payroll-related expenses, such as 401(k) contributions and health benefits, are accurately reflected on the W-2 forms. While QuickBooks Online Payroll provides some functionalities for editing W-2 boxes, specific adjustments, such as adding officer 401(k) contributions, may have limitations. Understanding these limitations and exploring alternative methods for making such adjustments is crucial for ensuring accurate W-2 reporting.
As we navigate year-end payroll adjustments, staying informed about the latest updates and features within payroll management platforms is crucial. QuickBooks Online Payroll, in particular, continues to evolve, introducing new functionalities and streamlining existing processes. By staying updated on these advancements, accounting professionals can leverage these tools to enhance efficiency and accuracy in payroll management.
Join the free webinar to learn more: Payroll Webinar
Be Proactive!
Proactively addressing payroll-related tasks and adjustments before the year-end closure is essential for maintaining accurate financial records and ensuring compliance with tax regulations. With the right strategies and tools, such as QuickBooks Online Payroll, accounting professionals can streamline payroll processes, accurately reflect the owner's wages and benefits, and confidently navigate year-end adjustments. By prioritizing these tasks, accounting professionals can contribute to their clients' businesses' overall financial health and compliance.
Relevant articles: https://www.artesaniaccounting.com/blog/attorney-partner-equity-what-is-attorney-partner-equity
Link to QBO payroll corrections form
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