Calendar Year End Reminders
by Karin M. Smith, MBA, SFO, CFE, Consulting Partner
Posted on January 10, 2024
As we turn the calendar to a new year, there are several calendar year end reminders to bump to the top of your to-do list.
Payroll Reminders and Updates
W2’s must be filed with the Social Security Administration and mailed to your employees no later than January 31, 2024.
It is important to ensure your W2 file is completely reconciled to all four quarter 2023 941s.
If this is the first time you will be filing W-2s on behalf of your organization, be sure you have set up a Business Service Online (BSO) account. This can take up to two weeks to complete the registration process. All organizations with 10 or more information returns must file with the Social Security Administration electronically.
Employees who have claimed “exempt” on their W-4 or A-4 must refile their tax certification form no later than February 15, 2024. If this is not refiled, the employer is required to change the employees withholding to single, zero deductions for federal withholdings and the default 2% withholding rate for state withholdings until the employee provides the employer with an updated A-4.
2024 Wage Updates
Arizona minimum wage has increased to $14.35 per hour for all non-exempt employees (City of Flagstaff increased to $17.40 per hour) effective January 1, 2024. It is important to ensure all hourly, non-exempt wages earned as of this date is paid at least this rate. If your work week/pay period crosses over January 1, it might be advantageous to have the minimum wage increase applied to the entire pay period to avoid any payroll calculation errors.
The Social Security wage base limit will increase to $168,600 for calendar year 2024. This means any wages over $168,600 will not pay social security payroll tax. A reminder of the additional employer withholding of 0.9% additional Medicare tax on an individual’s wages paid in excess of $200,000 in a calendar year, without regard to filing status.
The 2024 contribution limits for 403(b), 457(b) and 401(k) plans increased to $23,000 with a $7,500 catch-up contribution for employees who are 50 and older.
Accounts Payable/1099 Reminders & Updates
Effective calendar year 2024 for 1099s issued for 2023, organizations that file 10 or more information returns must submit the 1099s electronically to the IRS.
1099-NEC and 1099-MISC must be mailed/distributed on or before January 31, 2024. The 1099-NEC must be filed with the IRS by January 31, 2024 as well. The 1099-Misc must be filed with the IRS by February 28, 2024 if filed on paper or by April 1, 2024 if filed electronically.
A IRIS Taxpayer Portal Transmitter Control Code (TCC) must be obtained. This can take up to 45 days for processing. – https://www.irs.gov/tax-professionals/iris-application-for-tcc
A few of the most common payments reported on 1099s –
- Independent Contractor payments – 1099 NEC – Box 1
- Attorney Legal Service Fees – 1099 NEC – Box 1
- Legal Settlement Fees Paid to an Attorney – 1099 MISC – Box 10
- Medical & Health Care Services – 1099 MISC – Box 6
- Rents – 1099 MISC – Box 1
Remember – employees should not receive a 1099!
For more information on 1099s – https://www.irs.gov/pub/irs-pdf/i1099gi.pdf and https://www.irs.gov/pub/irs-pdf/i1099mec.pdf
Other Updates
The IRS mileage reimbursement rate increased to 67 cents per mile effective January 1, 2024, an increase of 1.5 cents.
As a reminder, if your organization is subject to the Arizona Department of Administration travel expense reimbursement limits, this rate did NOT increase and is still set at 62.5 cents per mile. See the State of Arizona Accounting Manual, Topic 50, section 95. This mileage rate was last updated on January 9, 2023. UPDATE: Effective January 8, 2024, the Arizona Department of Administration travel expense reimbursement limit has been increased to 65.5 cents per mile. See the State of Arizona Accounting Manual, Topic 50, section 95.
