Getting your business ready for 2022
Getting Your Business Ready for 2022
“It’s the most, wonderful time, of the year” is playing over the loudspeaker as you exit the grocery store, and you start to panic because you realize the holiday season is here. Many are planning for the holidays. Family gatherings, travel plans, getting the perfect gifts for loved ones, and the dreaded, I mean, joyful weekend with your favorite in-laws are just a few weeks away. Then your phone rings. As you go to answer you realize there are 10 emails that need a response. Why? Because, unlike most people, you own a business. You have work to do before you can enjoy the holidays. It’s that time of the year to close out strong & get your ducks in a row for 2022.
“A lot of people look to make changes this time of year in order to align with a new calendar year,” said Patrick Moraites, partner, and vice president at Tampa-based AXIS Group. “Especially from a federal and state unemployment tax standpoint, companies are looking to begin the year on the right foot and January 1 is often the push-to-start date because it makes everything clean and seamless.”
Before you get too mired in the hustle and bustle of end-of-the-year activities, Moraites recommends using the final weeks of 2021 to do a thorough review of your records and take care of any last-minute tasks to make sure you’re ready to hit the ground running in 2022.
“Instead of spring cleaning, you can think of it as an ‘end-of-the-year cleanup’ in preparation for the new year,” he said. “And if you get these things out of the way now, you’ll be able to enjoy your holidays even more.”
Here’s a checklist of key activities that business owners should perform prior to the end of the year:
- If your company has Covid vaccine requirements in place, make sure that employee vaccine cards and test records are being properly documented and stored.
- Check to see if W-4s are complete and if any year-end W-2 adjustments or additions are necessary, that information needs to be shared with the payroll coordinator prior to submitting your final payroll for the year.
- Employers must disclose the value of benefits they provide for each employee’s health insurance coverage on their W-2s under the Patient Protection and Affordable Care Act. Make sure this information is documented to avoid any hiccups or possible financial penalties.
- If your company offers a 401(k), communicate with employees to let them know about upcoming deadlines should they wish to make a change to their current plan. Along those lines, be sure to inform employees who are not yet enrolled that now is the time to take advantage of this valuable benefit.
- Don’t leave yourself vulnerable to fines related to I-9 compliance. Employers are required to complete and sign the employment eligibility verification section of the I-9 within three business days of the employee’s hire date. Make sure you have the most recent I-9s stored in a separate file from the employee’s general file along with the required documentation such as a copy of the employee’s driver’s license and social security card. Missing or incomplete files can cost employers from $573 to $20,130 per violation so it’s especially important to make sure everything is in order.
- See if you qualify for the Employee Retention Tax Credit. This program, which falls under the umbrella of the CARES Act, was created to encourage businesses to keep employees on their payroll through the pandemic. Unlike the better-known Paycheck Protection Program, the ERC is not a loan. Instead, it’s a cash credit that can be worth up to $7,000 per employee per quarter. The ERC credit has not been extended to Q4 but can still be applied for up until 2023. Contact us to learn more or just, click here.
- Beginning on January 1, the maximum earnings subject to the Social Security payroll tax will jump from $142,800 to $147,000 – an increase of $4,200. By the start of 2022, employers should adjust their payroll systems to account for this change and if they have employees who will be impacted (those earning more than the current taxable earnings cap of $142,800), they need to notify them ASAP.
Going through all these steps every year on your own can be a little overwhelming. If you are feeling the stress, then you might consider making a change and hiring a PEO in 2022. PEOs, which are single-source providers of integrated business support services, allow business owners to cost-effectively outsource everything from human resources to payroll to other administrative and employment-related tasks. With the support and expertise of the PEO behind you, you’ll be able to focus on growing your business and taking your success to the next level. Sounds like a pretty good new year’s resolution, right?
If you’re wondering if hiring a PEO is the right choice for you, the experts at AXIS Group can help you make the right decision. Contact us to schedule a consultation by clicking here.