When you’re running a business, there’s a lot that happens at the end of the year. Navigating the landscape of payroll, compliance, taxes, and other complexities is not an easy task for anyone — especially when you’re thinking about holiday gatherings, travel, and performance reviews.
Our goal is to make this process as smooth as possible so that you can close out your books with confidence. To prepare you for End of Year with Justworks, here’s an overview of what to expect:
Overview - End Of Year Task List
The End of Year Task List is your #1 destination for all things end of year. There, you’ll find important deadlines to help you stay on track, a task list where you can mark your progress, and resources to help you guide your employees through end of year to-dos.
Here are some tasks you can begin today to get a head start on End of Year:
Review Employee and Company Data for accuracy
Ask your employees to log in to Justworks and verify the information in their “Account Settings” tab, specifically:
- Employee name
- Employee home and work addresses, and mailing address (if applicable)
- FICA and/or FUTA exemption status
If any information is incorrect, update it in Justworks by the deadline on the End of Year Tasklist.
As a PEO, Justworks files in the aggregate for all of our customers. This means that making a change to an individual employee or company’s taxes is more difficult once a filing deadline has passed.
To make this easier next year, check out our Best Practices for Running Payroll.
Schedule Payments and Bonuses Early
For payments to be reflected on W-2s and 1099s for the current filing year, the recipient must receive the payment prior to December 31 of that year. To that end, ensure you have scheduled all payments and bonuses (hourly, salaried, supplemental, contractor, and vendor) by 2pm EST on your final processing day listed on the End of Year Task List.
If your employees are enrolled in a 401(k) plan either through Slavic or an external provider, they may wish to contribute the maximum amount for 2023: $22,500 or $30,000 for those 50 and over. Be sure to communicate with employees early in order to capture any deferral changes in time for final payroll. Don’t forget to remind employees to update their contributions for the new year after final payroll runs.
Tell Us If You’ve Paid Any US-Based Contractors Or Vendors Outside Justworks
Justworks doesn’t require contractor or vendor payments to be made in the system. If you would like us to provide a Form 1099 to your contractor, you should inform us of these payments in our system by your final processing day listed on the End of Year Task List.
Contractors and vendors should receive 1099 tax documents from your company once - meaning either your company generates these documents or Justworks does, but not both. As such, be sure to indicate “Do not file” in their Justworks Contractor and Vendor Settings to avoid generating a second form if you’re handling 1099 filings for these contractors and vendors externally.
You can do this in-app for both contractors and vendors, by navigating to their profile.
Record Taxable Fringe Benefits You’ve Paid To Employees Outside Justworks
If you have provided any taxable fringe benefits to your employees that you have not yet recorded in the Justworks Payments Center, be sure to do this as soon as possible. It’s best practice and, in many cases, required by IRS guidelines to record fringe benefits as they are provided to employees throughout the year. Fringe benefits have tax implications that can become burdensome for your employees (especially near the end of the year) if they are not recorded timely.
Recording these benefits in Justworks will add the value of the previously paid fringe benefit to your employees’ paycheck to record and deduct the applicable taxes. It’s a good idea to let your employees know when you’ll be recording this so they aren’t surprised by a lower net payment due to the fringe benefit tax deduction(s).
In instances where a prior check date is used, it may result in late deposit penalties and interest (see page 21 of IRS Publication 3151-A for information on late deposit penalties and interest). If so, Justworks may invoice a fee that is intended to cover any potential late deposit penalties and interest.
End of Year Tax Filing Forms
As your PEO, Justworks handles your quarterly and year-end employment-related filings so there is one less thing for you to think about during this busy season. To help ensure that we can take care of this for you with no issues, please have your employees keep their info, such as names, address, date of birth, and social security numbers up to date.
Justworks will file the following forms on your company’s behalf, as applicable: W-2, 1099-MISC,1099-NEC, W-3, 940, 941, 1096, 1094-C, and 1095-C.
Justworks will also issue the following forms to your employees, contractors, and vendors, as applicable: W-2, 1099-NEC, 1099-MISC, and 1095-C. For companies offering benefits through Justworks, the insurance carrier will provide Form 1095-B.
As your company’s PEO and employer of record for payroll tax purposes, your employees will see Justworks indicated as the employer on their Form W-2 rather than your company’s name. It will also reflect Justworks’ office information rather than your company’s because Justworks files taxes on behalf of your company. The 1099s for your contractors and vendors will list your company’s information.
W-2: Tax form issued to any US-based employee that receives a payment through Justworks
1099-NEC: Tax form issued to report US-based non-employee compensation of $600 or more
1099-MISC: Tax form issued to report US-based miscellaneous payments such as royalties and rents
940: Employer's Annual Federal Unemployment (FUTA) Tax Return
- Reports tax contributions to federal unemployment
- Justworks files Form 940 in the aggregate under Justworks' EIN
941: Quarterly Federal Tax Return
- Reports income taxes, Social Security, Medicare taxes withheld from US-based employees
- Justworks files Form 941 in the aggregate under Justworks' EIN
W-3 (Transmittal of Wage and Tax Statements): used to file the Copy A of Forms W-2 to the Social Security Administration (SSA)
- Justworks submits timely, by the January 31 deadline
Please be mindful of phishing schemes that are more common at the end of the year. As your PEO, we’ll be collecting a lot of information from you for the purpose of payroll and tax filing.
There are a few things you can do to protect your and your team’s information:
- Set a strong, unique password for your account (that you don't use for anything else) and don’t share your password with others. Justworks will never ask for this information from you.
- Be mindful of phishing schemes that are more common during end of year. You can hover over hyperlinks in emails to check that the URL is related to the company that appears to be writing to you.
- Be careful about what you share via email. Justworks will never ask you to send Social Security Numbers or other sensitive information over email.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.