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Gearing up for the 2019 Tax Season – A Payroll Service Firm’s Guide

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The holiday season is in full swing. But as every payroll professional is keenly aware, tax season is just around the corner. As 2018 winds down, it’s a great time to get a jump start on 2019. Apex HCM offers these tips and deadline guides to assure a stress-free start to the new year for your payroll service firm from your payroll software provider.

  • January 1-31: Prepare federal form W-2s. As you know, but it must be stated, the Protecting Americans from Tax Hikes (PATH) Act of 2015 set a new deadline of January 31 for employers to mail out the Form W-2 to all employees, allowing tax payers more time (about two months) to prepare their returns before the April 15 tax filing due date. This form also is used to report FICA taxes to the Social Security Administration.
  • January 2018: Review and update payroll system tax configuration. A slew of new state and federal changes affect how various benefits are taxed and reported. For instance multiple states enacted laws requiring employers to provide paid family leave insurance, but federal law has failed to keep pace, leaving many employers unclear on their federal compliance requirements. Helping clients with compliance on these and other benefits will prove an immense value.
  • January 15: Third-party sick pay notification. Corporate insurance providers are required to send annual statements of payments and taxes withheld from disability pay in 2018 no later than January 15. Copies should be provided to employees.
  • Marriage equity: Per the US Supreme Court’s June 2015 decision, all states now recognized same-gender marriages. Make sure your payroll clients adjusted their benefits taxing and reporting for all employees with same-gender spouses, civil union partners and registered domestic partners.
  • Moving expenses: Under the Tax Cuts and Jobs Act (TCJA), reimbursements for moving expenses made to employees or paid directly to third parties in 2018 are included in wages subject to federal income tax (FIT), federal income tax withholding (FITW), Social Security/Medicare (FICA) and federal unemployment insurance (FUTA). Exceptions exist, however, including one for members of the Armed Forces on active duty who moved per military order and incident to a permanent change of station. Various rules may apply for moving expenses incurred in 2017 but paid or reimbursed in 2018. And not all states are coupled with the federal Internal Revenue Code for moving expense payment and other fringe benefits, so be sure to double check with states where your payroll service clients are located.
  • April 1: Gross-up and tax advances: Perform all necessary gross-up calculations, impute all taxable amounts for 2018 and make tax advances when necessary (and allowable by law) to remedy withholding shortages resulting from imputed income. Remember that tax advances for 2018 must be repaid by employees no later than April 1, 2019.

Tax time need not be stressful. Apex HCM’s proprietary tax engine and payroll software can help assure your payroll service firm and your clients remain fully compliant with all federal and state tax requirements. Features include the ability to electronically pay and file taxes in most jurisdictions; automate quarter-end and year-end tax processing; and accurately reconcile bank accounts. Plus, we offer high level payroll tax expertise and assistance not just at tax time but throughout the year. Call 877-750-2739 or request a demo online. [https://apexhcm.com/contact-us/]