As year-end approaches, now is an ideal time for employers to take a proactive look at payroll records before W-2 reporting begins. With only a few months remaining in the calendar year, addressing potential issues now can help reduce administrative burdens during W-2 season and give employees time to make any necessary withholding adjustments.

Review Employee Information

Employers should verify that employee names, addresses, and Social Security numbers are accurate and up to date. Even minor discrepancies can create delays or require corrections during the W-2 filing process. It’s also a good time to confirm that former employees have current mailing addresses on file, as W-2s must be provided to all employees who received wages during the year.

Encourage Employees to Review Form W-4

Life events such as marriage, divorce, the birth of a child, or significant changes in household income can affect an employee’s tax withholding needs. Encouraging employees to review their Form W-4 now allows them to adjust withholding before the end of the year and helps reduce the likelihood of unexpected tax bills or large refunds when they file their returns.

Employees may also find the IRS Tax Withholding Estimator at IRS.gov helpful when evaluating their current withholding elections. For additional information on 2026 Form W-2 and W-4 updates, click here.

Review Benefit and Deduction Reporting

Before year-end, employers should review payroll deductions to ensure employee benefits, insurance premiums, retirement plan contributions, and other withholdings have been deducted and remitted correctly throughout the year. Addressing discrepancies now can help avoid reporting issues, employee concerns, and time-consuming corrections during W-2 preparation.

Businesses should also confirm that employer contributions to retirement plans and other benefit programs have been properly recorded and funded.

Evaluate Taxable Fringe Benefits

Employers that provide fringe benefits should begin gathering the information needed for year-end reporting. Common taxable fringe benefits include:

• Personal use of a company vehicle
• Group-term life insurance coverage exceeding $50,000
• Employer-paid moving expenses (with limited exceptions)
• Gift cards and other cash-equivalent awards
• Greater-than-2% S corporation shareholder health insurance premiums
• Cell phone allowances exceeding $100 per month

Reviewing these items now helps ensure the appropriate amounts are included in employee wages before W-2s are prepared.

Consider Electronic W-2 Delivery

Many payroll systems offer secure electronic delivery of W-2 forms. In addition to providing employees with faster access to their tax documents, electronic delivery can help reduce the risk of forms being lost, delayed, or intercepted through the mail. Employers should review their payroll provider’s available options and ensure employees are properly enrolled if electronic delivery is offered. QuickBooks Payroll users can provide employees with electronic W-2 access through the Workforce platform.

Plan Ahead for Employee Bonuses

As businesses begin planning holiday and year-end bonuses, it’s important to remember that bonus payments are taxable wages and should be processed through payroll. Rather than issuing separate checks outside the payroll system, employers should ensure bonus payments are properly reported and subject to the appropriate tax withholding requirements.

Start the Fourth Quarter Strong

A little preparation now can go a long way toward creating a smoother year-end reporting process. By reviewing employee information, evaluating withholding elections, confirming benefit and deduction reporting, planning for employee bonuses, and identifying taxable fringe benefits, employers can reduce last-minute stress and be better prepared for W-2 season.

At HTB, we understand that payroll compliance and year-end reporting can be time-consuming and complex. Our team works with businesses of all sizes to address payroll, tax, and accounting considerations throughout the year. If you have questions about payroll reporting, employee withholding, or year-end tax planning, contact us to learn how we can help support your business goals.