By Ann Jenkins
Your first step in year-end processing should be to make a backup of your company data. Year-end processing in the Payroll module can only be “reversed” by restoring from a backup, so be sure your backup is readable and kept in a safe, accessible location. It’s also recommended to copy your 2014 payroll data to an archived company before closing your live payroll company.
Following are a few tips for W-2 processing:
• For the Dependent Care amounts to print on the W-2 form in Box 10, each employee’s amount must be manually entered into the Dependent Care box on the FED Tax Summary screen. These amounts can be retrieved by printing a Year to Date Deduction Report for the Dependent Care deduction code.
• Any year-end bonuses or fringe benefits (such as Life Insurance over $50,000 or the personal use of a company car) must be processed through Payroll data entry prior to printing W-2s and before closing your Payroll year. Since FICA and Medicare taxes must be withheld on these types of wages, processing is much easier if done with a regular payroll. Fringe benefits are non-cash benefits and, as such, have no additional dollar amount available from which to actually withhold the employee portion of FICA and Medicare taxes.
• Third Party Sick Pay must be included on the employee’s W-2 and on your Quarterly 941, so these transactions must also be processed through Payroll data entry prior to printing W-2s. When printing W-2s through the Federal eFiling option, there is a checkbox on the recap screen for sick pay on the employee record.
• If printing W-2 forms in the standard W-2 printing, be sure to enter the correct Box 12 codes for your Pension Plans and the Employer-Sponsored Health Insurance cost.
• If your company has a Pension Plan, verify that the Retirement Plan check box is checked on participating employees’ W-2s. If it is not checked and the employee has a Pension Plan deduction in Box 12, go to Employee Maintenance and check the Pension Plan/Profit Sharing check box on the Main tab.
• W-2 forms and year-end reports must be run and your Payroll year-end processing must be completed before beginning your first 2015 Payroll.
• If you are not ready to print W-2s and must begin 2015 Payroll data entry, you can archive your 2014 Payroll data to a new company and close out your live 2014 Payroll for the year. You will be able to print your W-2 forms from the Federal eFiling Module after closing your Payroll for the year. Even if you are able to complete year-end processing before your first 2015 payroll, it is still recommended that you archive your 2014 payroll data to a copied company. Please see the accompanying article for copying companies.
• If you have employees who are flagged as terminated, period end processing will remove the constant information for those employees. If you are planning to print W-2s in your live company after Period End Processing has been completed through the Federal eFiling and Reporting module, you will want to change your terminated employees’ statuses to Inactive, so that the system retains the payroll information for those employees in order to print W-2s. Or W-2s can be printed from your archived company through Federal eFiling and Reporting module.
W-2 and 1099 forms printed through the eFiling option are on blank, perforated paper in the 4-UP format. These can be purchased online through Sage Software, Deluxe Check, Quill or Office Depot. Typically the office supply stores haven’t carried the blank perforated forms in prior years. If you prefer to purchase locally, we recommend Superior Office (formerly Superior Computer Supply) at 942-5577.
Sage has stopped supporting the standard tax form printing for W-2s and 1099s. Versions 4.4 through 2013 still have that option available on your Payroll Period End menu and in those versions you can still print to the standard preprinted W-2 forms but there will be no updates available for those options. Version 2014 no longer has the standard W-2 or 1099 printing option available on the menu, so if you are on that version you are required to print these forms through the eFiling option on blank perforated paper. The eFiling Service through Aatrix is offered on a transaction-fee basis of around $2 per employee to create and mail the employee forms along with filing your federal and state employer forms electronically. They also offer the ability to deliver your employees’ W-2s online. For more information, go to www.sagemas.aatrix.com.
The Social Security Administration site and the State of Kansas Department of Revenue site also allow you to manually file your W-2 forms by keying in the W-2 data online. The ssa.gov site gives you the option to print your employee W-2 forms once the data is keyed in. You can get more information on this option at www.socialsecurity.gov/employer under Business Services Online.
If you need help with W-2 form printing or any year-end processing questions, give our office a call. Additional Year-End information is available online at www.sagecity.na.sage.com.