T H E U LT I M AT E G U I D E :

GET TI NG YO U R BUS I NE SS R E ADY FO R EN D OF YEA R

2 01 4 E DITI O N

TA B L E O F C O N T E N T S
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Introduction

The Quick Checklist

Getting Your Employees Ready

The Checklist for Getting Your Employees Ready

Getting Your Accounting Ready

The Checklist for Getting Your Accounting Ready

Getting Your Taxes Ready

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The Checklist for Getting Your Taxes Ready

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How ZenPayroll Can Help

IN TROD U CTION
The end of year can be a very stressful
time for you and your business. Thats
why we wanted to help take some of the
anxiety out by providing you a helpful
guide on how to get your business ready
for the end of year.
Weve broken this guide into three
pertinent sections for your business:
employees, accounting, and taxes.
Each section includes detailed to-dos,
best practices, and common areas of
concern. We also provide a printable
checklist in each section so you can
quickly stay on top of things.
At ZenPayroll, we try to make payroll
easy and delightful. We believe many
of the anxieties for your companys end
of year preparation stems from legacy
processes and confusing information.
With this guide, we hope to help small
business owners like you navigate the
ins and outs of getting your business
ready for end of year.
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TH E QUICK CHECKLI ST
GETTING YOUR EMPLOYEES READY

GETTING YOUR ACCOUNTING READY

GETTING YOUR TAXES READY

VERIFY EMPLOYEE DATA

PROFIT & LOSS REVIEW

HOME OFFICE DEDUCTION

Verify employee name

Categorize your expenses

Check to see if you qualify

Verify employee address

Look for anomalies

Calculate your deduction

Verify employee Social Security number

Review P&L again after adjustments

File W-2

VERIFY EMPLOYEE BENEFIT INFORMATION

COLLECT W-9S
Collect W-9s from vendors and contractors

Confirm retirement plan eligibility

Issue 1099s for contractors (ZenPayroll will do this

Confirm health benefits (and imputed wages)

for you) who youve spent $600 or more for services

Confirm fringe benefits

Review sick time
Review vacation time
Review deferred compensation

VERIFY CONTRACTOR INFORMATION

Verify contractor name
Verify contractor address
Verify contractor identification number
File 1099

END OF YEAR EXTRAS

Grant year-end bonuses (if any)
Appreciate your team!

GATHER AND ORGANIZE YOUR RECEIPTS

VEHICLE AND MILEAGE DEDUCTION

Calculate your deduction at $0.56 per mile
Deduct additional costs like parking fees and tolls

TRAVEL EXPENSES
Collect your travel information including plane fare,
lodgings, meals, taxis, fees, tips

Gather receipts
Organize receipts by category
Copy down your thermal receipts

RECONCILE YOUR BANK ACCTS AND CREDIT CARDS

Check end-of year bank and credit statements match
your financial statements.
Match your accounting software ledger balance with
your accounts

ACCOUNTS RECEIVABLES AND INVOICES

Collect outstanding invoices before year-end
Check your Days Sales Outstanding to see if there
areas of concern

TAKE PHYSICAL INVENTORY

Match physical inventory with balance sheet
Appraise current value of inventory

GETTING
YOUR
EMPLOYEES
READY
The end of year is an important
time for every company, especially
for your employees. As a business
owner or employer, there are a
multitude of things you have to get
done to make sure your employees
are ready and compliant for the end
of year. Thats why we put together
this checklist to help you get your
employees ready for end of year.
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1. VERIFY EMPLOYEE DATA

For health benefits, youll want to confirm your employees

the requirements of Section 409A. Check the IRS site

have selected and contributed to their respective health

for more information.

Its important to review employee data for the end of

care plans. For employees on a Flexible Spending Account

the year, particularly with employee names, addresses,

(FSA), make sure your employees have spent the money

and Social Security numbers. Improperly filing this could

in their FSA before the end of the year (or the grace

lead to penalties for each mis-filed W-2. Check with your

period), or else theyll lose any money in their FSA.

employee to make sure his or her employee information

If your plan has a $500 carryover option, let your emp-

is correct.

loyee know.

If youre still not certain about your employees Social

If youve offered fringe benefits to employees, youll

or EIN. For information on how to fill out the 1099-MISC,

Security number or just want to get it verified, the IRS

want to make sure youve withheld taxes for any taxable

check out the IRS page.

provides employers with the Social Security Number

benefits your employees have received throughout the

Verification Service (SSNVS) to minimize employee

year. This includes fringe benefits such as: personal use of

name and SSN mismatches.

company car, employer provided parking, and employer

You can access all this information on your ZenPayroll

provided cell phones.

dashboard for employers and employees. ZenPayroll will

Some of these fringe benefits may be considered imputed

automatically calculate and electronically file your W-2s,

wages. An imputed wage is additional income typically

but you can access it anytime. The deadline to furnish the

associated with a service. A popular form of imputed

W-2 is on February 2.

wages that requires an end of year adjustment is group

Dont forget you have to verify employee data for both

active and terminated employees.

term taxable life insurance coverage over $50,000.

For more information on taxable fringe benefits, check out
IRS Publication 15-B.

2. VERIFY EMPLOYEE BENEFITS

We often set and forget employee benefits. But the end
of the year is an important time to verify your employee
benefit information for your employees.

For more benefit related content, check out SHRMs YearEnd Checklist for Retirement and Health Plan Sponsors.
Finally, be sure to confirm all sick and vacation time spent
by your employees. If your employee has sick pay, youll

3. VERIFY CONTRACTOR INFO

Youll want to make sure all your contractor information
is in one place. Like with employees, youll want to verify
your contractors name, address, and identification number. The ID number can be a contractors SSN, ITIN, ATIN,

As with your W-2s, ZenPayroll will electronically file all

1099-MISCs for you and send them to your contractors.
Youll have them available at all times on your dashboard
as well.
If youre switching payroll providers to ZenPayroll and
you run payroll before the end of the year, we can manage
your current years contractor 1099s. Of course, be careful
you dont double file your 1099s with another provider.

4. END OF YEAR EXTRAS

There are always a few loose strings at the end of the year
youll want to watch out for. In particular, the end of year
is a popular time to give bonuses.
With ZenPayroll, we recommend giving bonuses throughout the year with our spot bonus feature. But if you plan
on giving them out at the end of year, be sure the bonus

For most retirement benefit information, like your 401(k),

want to make sure its been withheld properly. Generally,

youll want to give advanced notice of benefits, like

sick pay is withheld like normal wages and you have to

enrollment features and withdrawal provisions to your

withhold taxes for employee and employer social security,

Finally, theres no better time than the end of year to

employees. If your company matches, your employees

Medicare, and Federal Unemployment Tax Act (FUTA).

appreciate your team. Of course wed hope youre doing

may want to fully fund their plan by the year-end. The

There are some exceptions so check the IRS for the full

this throughout the year too, but now is the time to plan

limit is $17,500 per employee and the catch-up for

list. For some companies that have a rollover, youll want

a company holiday party or white elephant gift exchange.

employees over 50 is $5,500. For more information on

to count what dates are available for next year.

has its taxes withheld.

retirement plans for small businesses, check out the

IRSs page on 401(k) for small businesses.

Deferred compensation can also be tricky. Your employees wages may be taxed this year if it does not meet

CHECKLI ST 1 :
G E T TI N G YO U R E M PLOYE E S R E A DY FO R E N D O F Y E A R
DIFFERENT BONUS TYPES!
Dont just make it about money! Try giving
something that your employee can find
useful. For example, at ZenPayroll, on your
second year anniversary, you receive a
great laptop backpack.
Give gifts for their friends & family. Send
your employee monthly flowers or a gift
certificate for two at a nice restaurant and
help bring the good cheer to their home.

1. Verify Employee Data

3. Verify Contractor Info

Verify employee name

Verify contractor name

Verify employee address

Verify contractor address

Verify employee Social Security #

Verify contractor identification number

File W-2

File 1099

2. Verify Employee Benefit Info

4. End of Year Extras

Let them give back to the community.

With ZenPayroll Giving, you can give directly to your favorite charity right in app!

Confirm retirement plan eligibility

Grant year-end bonuses (if any)

Confirm health benefits

Appreciate your team!

Give them a new experience! Your employees may love a free wine-tasting class
or trip abroad. At ZenPayroll, we give a
free ticket to anywhere in the world on an
employees one-year anniversary.

Confirm fringe benefits

Give praise. One of the most neglected

but effective ways to show your gratitude
is praising your employees in front of their
peers. It is a great motivator and can really
bring a lot of satifaction.

Review sick time

Review vacation time
Review deferred compensation

GETTING
YOUR
ACCOUNTING
READY
One thing that is important to do
at the end of the year is to close
your books. Thats why we put
together a check-list of the most
common accounting to-dos for the
year-end. Whether you work with
a CPA, bookkeeper, or just DIY,
this checklist should help get your
accounting ready for end of year.
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1. PROFIT & LOSS REVIEW

categorize many of your expenses, which helps you

7. TAKE PHYSICAL INVENTORY

reconcile your paper receipts. Be sure to copy down

The first thing you should do before and after this

your thermal receipts because they have a tendency

For some of you, theres no need to take physical

checklist is review your profit and loss statement.

to fade too.

inventory. For others, getting an accurate account

Its a good reminder to see how youre spending your

money but also if your expenses are categorized.
Fortunately, if you use an online accounting provider

of your inventory is important. Youll want to match

4. RECONCILE YOUR BANK

ACCOUNTS AND CREDIT CARDS

it with your end of year balance sheet. Itll also be

helpful for your bookkeeper, especially to know how
much youve spent on inventory throughout the year

like Xero or Freshbook, they can sync directly with

The end of year is important to make sure what you

your bank account or credit card statement and help

and its current value. To determine the value, you can

have in your financial statements match up with

you categorize your expenses.

use the gross profit method or the retail method.

your bank and credit card accounts and your year-

Return to your P&L again after you reconcile your

bank accounts, receipts, and other potential concerns.

2. COLLECT W-9S
Did you use vendors this year? If so, youll have to
collect W-9 forms for each of them. The W-9 form
can be used as a paper trail for the IRS to track your
expenses. Its also a way for the government to keep
track of vendors and their income.

end statements. If you are using online accounting

As always, refer to your tax specialist, accountant,

software, its important your ledger balance matches

or bookkeeper for counsel. All information listed

as well.

here is for the 2014 tax year.

5. CHECK PAYROLL
A payroll provider like ZenPayroll should have withheld taxes for your employees throughout the year.
However, there are a few common areas to watch
out if youre worried about end of year accounting.
Weve covered this the prior section but they include

For every vendor youve spent $600 or more for ser-

withholding taxes for fringe benefits, deferred comp-

vices, youre required by law to issue and complete

ensation, and end of year bonuses.

a 1099 form. The 1099 must be filled out by January

31 and sent to the IRS by February 28 (or March 31)
if you file electronically. Fortunately, your accounting
software solution will likely have a line item for all
1099 vendors and contractors. In addition, ZenPayroll
will file the contractor 1099s on your behalf.

6. ACCOUNTS RECEIVABLES AND

INVOICES
Theres a tendency to forget to collect on your invoices if you dont use invoicing software. Without
a good collection system, you may have checks lost

3. GATHER AND ORGANIZE YOUR

RECEIPTS

in the mail. Read our piece on How to Master Small

Its important to gather and organize your receipts.

year, manage your Days Sales Outstanding and follow-

A shoebox of receipts is the last thing your CPA wants

up with your invoices more than a few weeks out.

to see. An easy way to organize your receipts is to use

Of course, collecting on your accounts receivable

a software solution, which syncs with your credit card

is good practice year-round.

Business Accounting in One Week to learn more about

invoice collection throughout the year. For end of

or bank account. That should help you account and

C H EC K L IST 2:
GETTING YOUR ACCOUNTING READY FOR END OF YEAR

1. Profit & Loss Review

4. Reconcile your bank accounts

Categorize your expenses

and credit cards

Look for anomalies

Check your year end bank and credit statements

Review P&L again after adjustments

match with your financial statements.

Match your accounting software ledger balance

2. Collect W-9s

with your accounts

ALMOST ACCOUNTANTS!
Mick Jagger: The frontman of the
Rolling Stones attended the prestigious London School of Economics
on scholarship. He studied accounting
and finance but after reuniting with
his childhood friend, Keith Richards,
decided being the biggest rock star
in the world was a better career move.

Collect W-9s from vendors and contractors

Issue 1099s for vendors (ZenPayroll will do
this for you) who youve spent $600 or more

5. Check Payroll
See checklist on Employees

for services

6. Accounts Receivables and Invoices

3. Gather and Organize Your

Collect outstanding invoices before the year-end

Receipts

Check your Days Sales Outstanding to see if

Gather receipts

there are areas of concern

Organize receipts by category

Copy down your thermal receipts

7. Take Physical Inventory

Match physical inventory with your balance sheet
Appraise current value of inventory

Chuck Liddell: The former Light Heavyweight champion of the UFC may have
as easily gone from MMA to CPA.
Chuck graduated from California Polytechnic University with a Bachelor of
Arts Degree in Business/Accounting
in 1995.
Cris Carter: The Hall-of-Fame wideout
is known for catching touchdowns.
In an alternate universe, Cris couldve
been catching accounting mistakes.
In an interview with the StarTribune,
he said: I always loved math in high
school and I thought that I would be an
accountant. But I also thought I would
be better at counting money in the NFL.

GETTING
YOUR TAXES
READY
Doing your own corporate taxes can
be challenging. There are a number
of deductions and rules youll want
to consider so you can minimize
your tax burden. Dont wait until
April to get your company taxes
in order. We selected a few of the
most common areas of concern
for small business owners and put
them in this helpful checklist.
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1. GO OVER YOUR BOOKS

your deduction, you simply multiply the portion of

There are even more tax savings you may be

your home dedicated to home office use (capped at

eligible for. Check out the IRS site for more

Theres no better time to go over your books to check

300 square feet) by $5 to get your deduction, which

information on credits and deductions and

your P&L statement for any red flags, particularly if

is capped at $1,500 (300 x $5).

Publication 463, information on Travel, Entert-

you work with a bookkeeper or accountant. While

you can always make adjustments in the future, take
time at the end of year while some of the context is
still fresh. See the prior section for more accounting
concerns.

Check the IRS site for updated information.

4. VEHICLE AND MILEAGE

DEDUCTION

2. GATHER AND ORGANIZE YOUR

RECEIPTS

For some small business owners, operating a vehicle

As we mentioned previously, expense reporting can

standard mileage rate.

be a real challenge in April if youre opening a shoebox

of receipts. The IRS may audit your filing for up to
six years, so its recommended you keep a record of
your receipts for at least that long. Most accounting
software providers can even help you categorize
your expenses automatically. See here for some recommended vendors ZenPayroll integrates with.

3. HOME OFFICE DEDUCTION

One of the most popular deductions for small
business owners (and yet not taken) is the home

is part of their daily work. The IRS allows you to deduct

your mileage based on two methods, actual cost or

The actual cost method requires you to keep detailed

records of your business-related expenses, which is
prohibitively difficult for many of us. If you choose to
take the standard mileage method, the standard rate
is 56 cents per mile for business miles driven in 2014.
In addition to mileage, you may deduct additional
costs like parking fees and tolls. See here for more
information on transportation related deductions.

5. PAYROLL TAXES

office deduction. The IRS provides two methods

The end of year is a great time to gross up any fringe

for calculating your home office deduction, simp-

benefits for tax withholding purposes if they were not

lified and regular. Since most entrepreneurs will

filed throughout the year. Fortunately, ZenPayroll can

use the simplified option, well cover that here.

help you do this within our service. Check out our earlier

First, youll have to qualify for the deduction. If you

meet the two main criteria 1) Regular and Exclusive
Use and 2) Principal Place of Your Business, then
your business is eligible. Check the IRS site for more
information.

ainment, Gift, and Car Expenses.

section on how to get your employees ready for the

end of year for more information.

6. TRAVEL EXPENSES
Do you travel frequently for work? If so, you may be
eligible to deduct the cost of the trip, including plane

The simplified option uses a standard $5 per square

fare, lodging, meals and incidental expenses such as

foot (rather than actual expenses determined by

taxis, fees and tips. For more information on travel

records) to determine the deduction. To calculate

expense deductions, check out the IRS site.

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CH EC K L IST 3 :
G E TTI NG YOUR TAXES REA DY FO R E N D O F YE AR

1. Go Over Your Books

See checklist on Accounting

4. Vehicle & Mileage Deducation

Calculate your deducation at $0.56 per mile
Deduct additional costs like parking fees

2. Gather & Organize Receipts

See checklist on Accounting

3. Home Office Deduction

5. Payroll Taxes
See checklist on Employees

6. Travel Expenses

Check to see if you qualify

Collect your travel information including

Calculate your deduction

plane fare, lodgings, meals, taxis, etc.

SOME FUN TAX FACTS!

Aruba has the highest income tax in the
world with up to 58.95%.
In 1660, England placed a tax on fireplaces. People covered their fireplaces
with bricks to conceal them and avoid
paying the tax.
In 1705, Russian Emperor Peter the Great
placed a tax on beards, hoping to force
men to adopt the clean-shaven look that
was common in Western Europe.
New York City places a special tax on
prepared foods, so sliced bagels are
taxed once as food and again as prepared
food, thus creating a sliced bagel tax.
Pennsylvania has a tax on coin-operated
vacuum machines at gas stations.
The hardest thing in the world to
understand is the income tax.
Albert Einstein

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HOW
ZENPAYROLL
CAN HELP

ZenPayroll has been a lifesaver. I dont have to

worry anymore and all my back office loads are
fixed with a push of a button thats special.
Tristan Walker, Bevel

The end of year can be stressful. With ZenPayroll,

running payroll doesnt have to be. We make sure
your end of year payroll is easy. Thats why we
calculate, pay, and file your payroll tax filings for
you. We built our software with small business
owners in mind, because we know youre already
busy growing your business.
For more information on how ZenPayroll can help
you, check out the following resources:
ZenPayroll Blog: This is our ongoing corporate blog
that covers the latest small business best practices,
updated multiple times a week.
ZenPayroll Resources: Here are some of resources
to help businesses like yours with funding, productivity, compliance, accounting, and more.
ZenPayroll Customers: See what other ZenPayroll
customers are doing to grow their business.

JOIN Z E NPAY RO L L TO DAY

AND GET YOUR FIRST TWO MONTHS FREE

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www.zenpayroll.com (800) 936-0383

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