Preparing Payroll Records Before W-2 Season: What Every Small Business Should Check

Preparing Payroll Records Before W-2 Season: What Every Small Business Should Check

W-2 season is coming fast, and small bookkeeping mistakes made during the year can turn into filing errors in January. Taking time now to clean up payroll records helps avoid corrected W-2s, IRS notices, and compliance issues.

Problem: Payroll totals do not match your bookkeeping system

This happens when adjustments, reimbursements, or bonuses were entered in payroll but never recorded properly in your books.

Why it matters

If your bookkeeping numbers conflict with payroll reports, the W-2s sent to employees and the IRS will be inaccurate. Mismatches often lead to penalties or amended filings.

What to do now

Review year-to-date wages, taxes, and benefit deductions. Confirm that gross pay in your books aligns with payroll provider totals. Update employee information, check Social Security numbers, and confirm addresses before forms are issued.

Example A
Chantilly service company found that two bonuses paid in July were never recorded in their books. Correcting the entries early kept their W-2s accurate and avoided flagged discrepancies in IRS wage reporting.

Contact us to discuss how to implement a simple year-end payroll review that supports accurate W-2 reporting and tax compliance.