Year End Planning

As we head into the final months of 2023, there are a handful of things accounting departments should start doing now to be better prepared to close out the current year and head into the new year. Below are some of the items to remember to do before the clock strikes midnight on December 31 of this year:

• Review your 2023 consultants and vendors to make sure you have their tax ID information and updated addresses. You can obtain this information by requesting a copy of their W-9 form. This will help in January when you need to send out 1099-NEC or 1099-Misc. Both documents are due January 31, 2023, and chasing this information at the last minute can be stressful.
• Review payroll information before the last payroll of the year to make sure employees’ W-2 are accurate. Here are some items to include in your review:
  • Double-check that all manual checks have been entered into the payroll system
  • Record any third-party sick pay to the payroll system – sick or disability?
  • Process any bonus payments so they are reflected in 2023 earnings
  • Review employees’ deductions and tax withholdings.
  • Confirm employees’ addresses are current.
• Review any checks over 60 days old that haven’t cleared your bank accounts. Follow up with vendors to either deposit checks or see if the vendor has lost the check and needs it reissued. This will make your cash balance accurate for year-end and won’t cause any issues when reporting out 1099s in January.
• Remind staff that deductions for flexible spending accounts, health savings accounts and retirement plans reset on January 1. Encourage them to review what they are contributing and see if they would like to change the amount of their contributions.
  • The contribution limits for 401k’s and 403b’s for 2023 is $22,500 with an additional $7,500 catch up allowance for employees over 50. The limit for 2024 will be $23,000 (same catch-up allowance).
  • Employees can carry over $640 of their medical flex spending account, if your plan allows.

These are just some of the steps you can begin to take now to be better prepared to end your financial year without last-minute pressure. As always, if you need assistance, we can help. For more information and support, contact us at insource@insourceservices.com or 781-235-1490.