Q&A: Tax Tips: Getting ahead of year-end requirements

Christian Flaten, Director of Product Marketing, Zenefits
Nov 2, 2021

There are two certainties at the end of every year: the holidays and taxes. On this episode of POPS!, we’ll help you get ahead of the latter with year-end tax tips from Zenefits Director of Product Marketing Christian Flaten. You’ll hear the special circumstances to keep in mind with COVID-19, and how to make sure […]

There are two certainties at the end of every year: the holidays and taxes. On this episode of POPS!, we’ll help you get ahead of the latter with year-end tax tips from Zenefits Director of Product Marketing Christian Flaten. You’ll hear the special circumstances to keep in mind with COVID-19, and how to make sure employee data is up-to-date to ensure accuracy—especially with employee relocations.

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On this episode, you’ll hear: 

  • [00:34-02:22] The basics: COVID-19, W2 data, payroll, company data, and special circumstances
  • [02:25-02:41] How to verify employee social security
  • [03:00-03:53] Employee relocation and the employer’s responsibility with temporary or permanent moves
  • [03:55-04:52] Other special considerations

Transcript

Christian: How could I get ahead of your end tax requirements?

Didi: Welcome to pops the show that shows you how to shift from human resources, paperwork to people, operations for the new world of work. How by answering one question at a time.

To help us answer your question. Here’s Christian Flaten, Director of Product Marketing at Zenefits. 

Christian: So to start, let’s jump into the basics. When it comes to the standard stuff, there are five key things to keep in mind. First COVID-19 employers are required to report the amount of qualified sick and family leave wages paid to employees under the families.

First coronavirus response act either on form W2 box 14. Or in a statement provided with the form W2. Secondly, let’s talk about employee W2 data ensure your employee data is up to date, name, address, dependence, et cetera. We’ve seen a lot of people move over the past year. So this is especially important.

Number three, payroll data are your earnings taxes, withheld and items like 401ks, accurate check now and avoid tax amendments. You need to look at what the employees have selected for their different benefits and make sure that the taxation of those benefits make sense for what they’ve opted in for think Roth versus traditional 401k, et cetera.

Number four, company data employer address goes on the W2 along with the employer, federal identification number, make sure that this information is correct in your system. Verify that you’ve entered a tax ID and payroll for every state where your employees live or. I remember five special circumstances, run a history summary to confirm W2 against, against samples, move, promoted, live, or work at different locations, et cetera.

Using 401k. As an example, again is the year to date 401k amount being represented in box 12 of the W2. So those are some special circumstances that you’ll want to look for and running that history summary will help you find any description. Uh, so I said there only about five things. There is a number six on the list as well, make sure to verify social security and the social security administration actually has a verification system.

Um, so you can go onto that site. And I did advise just testing at least 10 employees, social security numbers in your system to ensure that they’re accurate. So I know we’re here to kind of talk about some special circumstances since this past year. And actually two years have been a little different than previous years.

Just changes in the workplace. And of course, uh, regulatory changes with COVID-19. So let’s highlight some of those special circumstances. Something that really catches employers is that they don’t always update the payroll system with the most recent employee information, say an employee moved and their address wasn’t updated immediately in the payroll system.

They may be taxed in appropriately. If they moved to a new state. Next let’s talk about relocation and the employer responsibility with temporary or permanent moves. So the department of labor does provide some guidance on this and they call it localization. Basically. Where is the primary workplace where our unemployment taxes are reported and accumulated?

Their guidance says that if relocation is temporary in nature, it would be the primary work location that the employee would remain. It. They don’t exactly specify how long temporary is, but you don’t want to make it hard on an employee. If they were to file for unemployment, you wouldn’t want them to have to go to a bunch of different states to claim that last couple of special items to make sure you’re aware of for the end of the year.

Number one, here, employer social security number. Just make sure to update your 9 41 line 13 B with the deferred amount of employer, share of social security, have a backup plan or have a plan to pay back. It’s a deferred social security taxes. The law requires 50% of the deferral must be received by 12 31 20 21.

And the remainder must be received by 12 31 20 22. So you do have another year to get the remainder paid back. Number two here we have paid COVID time off. So ensure that the 6 2 0 1 tax credits are properly reflected on your 9 41 returns. And those are reflected on lines five, a I and 5 8 5 8 1 5 8 2 as well as line 11 B.

So if you do use benefits, this will be done for you automatically. So I know we talked about a lot. We have also captured much of what we spoke about today. Within this benefits help center on a page called 2021 pay tax prep checklist. We will link that in the description for you to check out.

Didi: Do you have a question for our experts? Click the link in the show notes, or if you’ve got other ideas and feedback about our show, send them to [email protected]

 

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