QuickBooks Payroll Bulletin

Year-End Payroll Checklist

The end of the year is an extremely busy time for small-business owners. To ensure your payroll processing goes as smoothly as possible, we've compiled this handy list of six key year-end payroll tasks for Assisted Payroll subscribers.

Check these off your list, and you'll be prepared for another smooth year of payroll processing in 2008.

1. Turn on Automatic Updates for QuickBooks Payroll.

The best way to make sure you have the latest payroll updates is to turn on the Automatic Updates feature, which tells QuickBooks to check for new payroll updates automatically. Automatic Updates is the easiest way to stay on track with updates.

If you don't turn on Automatic Updates, make sure to check for new updates every time QuickBooks prompts you to. QuickBooks Payroll releases payroll updates as many as 12 times in a year—and sometimes more—because federal and state governments make changes to their tax laws, rates, and forms at any time during the year.

Since the actual number and dates of payroll updates vary depending on federal and state actions, we highly recommend that you connect to the payroll service each time you pay your employees (or at least every 45 days) to ensure that you have the most current tax table and forms available.

To learn about the latest payroll update, go to www.quickbooks.com/payrollnews.

For instructions about updating your software and enabling or disabling Automatic Updates, click the link for your version of QuickBooks below, and then click on Automatic Update:

2. Check that you have installed the latest payroll update.

To determine whether you have installed the latest payroll update:

Check the Payroll News Web site to find out the number of the latest payroll update.
Check whether that is the same update as you have in your QuickBooks: From the Employees menu in QuickBooks 2008, 2007, and 2006, choose Get Payroll Updates. From the Employees menu in QuickBooks 2005, choose Get Updates, and then Get Payroll Updates. The tax table (payroll update) version number is located at the top of the window.

3. Update your state unemployment and state disability insurance rates.

QuickBooks Payroll subscribers must update their state unemployment insurance (SUI) rates themselves. The QuickBooks Payroll tax table does not include updates to these rates, because states assign each employer a unique rate based on their employment history.

Employers located in states that have state disability insurance (SDI) may also need to update their SDI rates themselves. For some states, however, the state disability insurance rate is supplied by the tax table, and you cannot edit it. If the rate changes, check to see if you have the current tax table.

If you use Assisted Payroll, update your rate on or after Jan. 1, 2008, but before you run your first payroll of the year.

Do not update your rate before Jan. 1. If you do, your state unemployment (or disability) withholdings for your remaining 2007 paychecks will use the new rate and will be incorrect.

Update your SUI or SDI rates in QuickBooks by editing the appropriate payroll item:

In QuickBooks 2008 and 2007: Select Manage Payroll Items, and then choose View/Edit Payroll Item List.
In QuickBooks 2006 and 2005: From the Employees menu, choose Payroll Item List.
Select your SUI or SDI payroll item.
If your state disability insurance is collected by a private agency, the associated payroll item may be set up as other tax, not state disability. How do I edit the rate of a user-defined other tax payroll item?
From the Payroll Item menu button, choose Edit.
Click Next in the Payroll Item Setup wizard until you see the tax rate window.
Enter the new rate in the Company rate or Employee rate field.
Click Next until you can click Finish.

4. Verify and confirm the yearly limits to your retirement plan.

Remember that retirement accounts have limits that can change every year. Make sure that you verify the limits of your plan and that all withholdings are accurate and within the limits.

Please consult your accountant, state agency, federal agency, or plan administrator for more information concerning the limits for 2007 and how they affect your specific retirement plan.

5. Confirm that the names and Social Security numbers you have for employees match the Social Security Administration's records.

Filing incorrect or incomplete employee information creates problems for both employers and employees. Incorrect information can lead to employees not receiving proper credit for earnings, which can affect future eligibility and/or amounts paid through Social Security programs. In an effort to prevent the problems created by incorrect reporting, the IRS and the Social Security Administration (SSA) have begun a campaign to eliminate mismatched names and Social Security numbers reported on W-2 forms. The SSA will send letters to companies that have a large number of mismatches. If you receive such a letter, please contact a payroll service representative for further assistance.

To minimize errors, employers can verify that an employee's name and Social Security number match the SSA's records. To do this, employers can take advantage of the SSA's Social Security Number Verification Service (SSNVS). This service allows employers to verify an employee's name and Social Security number with the SSA. You can verify up to 10 names and SSNs (per screen) online and receive immediate results.

Visit the Social Security Administration's SSNVS Web site for more information about SSNVS.

6. Log into the Payroll Tax Center to view tax returns and W-2s.

The Payroll Tax Center is your one-stop shop for all of the forms Assisted Payroll is filing for you. On Jan. 10, 2008, you can log in and view your employee W-2s, and on Feb. 5, 2008, all of your year-end returns will be available for download, e-mailing, and printing.

To log into the Payroll Tax Center, follow these instructions.

For QuickBooks 2008, 2007, and 2006:

From the Employees menu, select Payroll Center.
Select the View/Download Tax Forms or View/Print Forms & W-2s button near the bottom right side of the page.
Enter your payroll PIN when prompted.

For QuickBooks 2005:

From the Employees menu, select Payroll Services.
Select View/Change Payroll Service Account Information.
Select the View/Download Tax Forms link near the bottom right side of the page.
Enter your payroll PIN when prompted.