Preparing your checklist

With 2018 year-end approaching, it is important to not miss any of the necessary tax activities that need to be completed. Some of the changes this year announced by the IRS may impact you as an employer. Staying on top of these changes can help you plan accordingly.

Your QuickBooks Desktop Payroll Basic, Enhanced, or Standard - Year End Checklist

Complete before generating forms

Install the latest payroll update

  1. Find out the latest payroll update version in Intuit Intuit QuickBooks Desktop Payroll News & Updates
  2. In QuickBooks Desktop, go to Employees menu, choose Get Payroll Updates.
  3. Check whether you have the latest payroll update version. The tax table (payroll update) version number is located at the top of the window.
  4. If not on the current payroll update, select Download Entire Payroll Update and select the Update button to the right.

Turn on Automatic Updates for QuickBooks Desktop Payroll

The best way to make sure you have the latest QuickBooks Desktop and payroll updates is to turn on Automatic Updates feature, which tells QuickBooks to check for new payroll updates automatically. Automatic Updates is the easiest way to stay on track with updates.

If you don't turn on Automatic Updates, make sure to check for new updates every time QuickBooks Desktop prompts you to. QuickBooks Desktop Payroll releases payroll updates as many as 12 times in a year, and sometimes more, because federal and state governments make changes to their tax laws, rates, and forms at any time during the year.

Since the actual number and dates of payroll updates vary depending on federal and state actions, we highly recommend that you connect to the payroll service each time you pay your employees (or at least every 45 days) to ensure that you have the most current tax table and forms available. For instructions about updating your software and enabling or disabling Automatic Updates, see the QuickBooks Product Updates page. If your QuickBooks Desktop product is not selected, select Search Again.

Order year-end supplies

To order your year-end supplies from Intuit:

To ensure posting compliance with recent state labor law changes, visit the Compliance web site.

Intuit recommends you order your year-end supplies as soon as possible to ensure timely delivery and distribution.

Verify active employee data

The end of the year is a good time to review employee information that can affect W-2 forms and, possibly, paychecks issued in the next tax year. Be sure to check:

  • Names, addresses, and social security numbers
  • Retirement plan eligibility
To review employee data in QuickBooks Desktop:
  1. Go to the Employee Center and select the Employees tab.
  2. Select the drop-down list below the Employees tab.
  3. Double-click the employee name to review the names, addresses and social security numbers for any errors or missing information.
  4. Select the Payroll Info tab.
    Note: If the Employee is covered by a qualified pension plan checkbox is selected in the employee record, the same checkbox will be selected on the W-2 form. You can also select or click to clear the checkbox directly on the W-2 form. Make any changes necessary and save the changes by selecting OK.
    • Names, addresses, and social security numbers
    • Retirement plan eligibility

Perform any year-end bonuses

To write a bonus check for an employee:

  1. Go to the Employee Center and select the Payroll tab.
  2. Select the Pay Employees tab, and in the Create Paychecks section, select Start Unscheduled Payroll.
  3. In the Enter Payroll Information window, select the employee to whom you're giving a bonus.
  4. Select Open Paycheck Detail.
  5. Clear any earnings or benefits for the selected employee by clicking in each field that has a rate or number and pressing Backspace or Delete.
  6. In the Item Name field, add the bonus item, and enter the amount of the bonus in the Rate field. Note: If you want to give the employee the entire bonus amount, select the Enter net/Calculate gross checkbox (this option is only available with Enhanced Payroll).
  7. Check that the Do not accrue Sick/Vac checkbox is selected.
  8. Select Save & Next or Save & Close.
  9. Select Continue.
  10. Select Create Paychecks.

Verify terminated employee data

Regardless of the current employee status, any employee who received a paycheck during the year will receive a W-2 form for that year.

Be sure to check terminated employees for:

  • Names, address, and social security numbers
  • Retirement plan eligibility

Be sure that terminated employees are released correctly in QuickBooks Desktop.

To verify that terminated (released) employees are set up correctly:

  1. Go to the Employee Center and select the Employees tab.
  2. Change the View to All Employees.
  3. Select the name of the released employee.
  4. Select the Transactions sub-tab.
  5. Double-click the termination (typically the last) paycheck and select Paycheck Detail. Ensure all vacation and sick time has been paid out.
  6. Close out of the paycheck. Do not save any changes. If you need to pay out vacation or sick time, create a new check for this amount and deliver to the employee.
  7. Double-click the name of the released employee to access the Edit Employee window.
  8. Select the Employment Info tab then select the Termination sub-tab.
  9. Verify that all information is current and that the Release date is correct.
  10. Select OK to close the Edit Employee window.

Verify and review benefit information for your employees

Before you create paychecks in the new tax year, confirm that all compensation and benefit types are correct, and that the rates for each is correct. Be sure to check for:

  • Deferred compensation
  • Group term life insurance
  • Third-party sick pay

To review benefit information:

  1. Go to the Lists menu and select Payroll Item List.
  2. Double-click the item to review the setup.
  3. Navigate to the Tax Tracking type window and check that the correct Tax Tracking type is selected. If you are unsure what Tax Tracking type should be selected, consult your accountant or the agency that manages the benefit for your company.
  4. Navigate to the Default Rate and Limit window and ensure the default rate and annual limit are correct. If there are different rates or limits for individual employees, you may want to ensure these fields are blank and set the rate and limit for each employee separately.
  5. Select Finish to save any changes you have made.

To review any benefits that has been added to the employee defaults or to an individual employee record:

  1. Go to the Employee Center and select the Employees tab.
  2. Double-click the employee name
  3. Select the Payroll Info tab.
  4. Review the information in the Additions, Deductions, and Company Contributions section. If you need to edit the information, click in the field and make the edit and then select OK.
  5. Select OK to save your changes.

Any future paychecks created for that employee will include the new information.

For more information about retirement benefits limits and contribution deadlines, visit

Review employee wages, sick time, and vacation hours

Review wages and benefit levels.

Before your first payroll of the new year, you may want to take the time to review wages and benefits for all active employees. To do so:

  1. Go to the Employee Center and select the Employees tab.
  2. Double-click the name of an employee to access the Edit Employee window.
  3. Select the Payroll Info tab.
  4. Ensure the items, rates and limits are correct in the Earnings and Additions, Deductions and Company Contributions sections.
  5. Select OK to close the Edit Employee window.

Review sick and vacation settings.

To review sick and vacation hours for an employee:

  1. Go to the Employee Center and select the Employees tab.
  2. Double-click the name of the employee to access the employee record.
  3. Select the Payroll Info tab.
  4. Select the Sick/Vacation button.
  5. In the Sick and Vacation sections, review the sick and vacation settings. For example, if your company sick or vacation policy indicates that the hours reset every January 1st, then make sure that the Reset hours each new year checkbox is selected.
  6. Select OK to save any changes and close the Sick and Vacation window.
  7. Select OK to close the Edit Employee window.

Verify and update your State Unemployment and State Disability Insurance rates

If your state unemployment rate has changed, you will need to update the rate in QuickBooks.

To update your State Unemployment Insurance (SUI) and State Disability Insurance (SDI) rates in QuickBooks:

  1. Verify the current SUI and SDI rates for your state.
  2. In QuickBooks, go to the Lists menu and select Payroll Item List.
  3. Select your state disability insurance or your state unemployment insurance payroll item.
    Note: If your state disability insurance is collected by a private agency, the associated payroll item may be set up as other tax, not state disability.
  4. Select the Payroll Item button and then select Edit Payroll Item.
  5. Select Next until you see the Tax Rates window.
  6. Enter the new rate in the Company rate or Employee rate field. You must enter the rate for each quarter.
    Note: QuickBooks allow you to enter next year's SUI tax rates prior to the start of a new year (when your computer system date falls between July 1 and December 31 of the current year.) If this applies to you, field(s) will appear at the bottom of the screen for you to enter your new SUI rate for next year.
  7. Select Next and then select Finish to save your changes.

Verify 1099 Vendor Information for 1099 and 1096 form filing

For instructions on how to set up 1099 vendors and pay them in QuickBooks, see Set up a 1099 Independent Contractor Vendor and print 1099/1096 forms. Check to ensure the accuracy of information such as name, address and federal identification numbers.

For information on e-filing 1099s, see 1099 E-File: QuickBooks Desktop setup, troubleshooting, & FAQs.

Important Dates

Deadlines for Forms W-2, W-3, 941 (4th Quarter), 943, 944, and 940 payments

January 31, 2019

  • Form W-2: Furnish copies B, C, and 2 to each person who was your employee during 2016. See General Instructions for Forms W-2 and W-3.
  • Form W-2 and Form W-3: Send Copy A of Form(s) W-2 and W-3 to the SSA
  • File Form 941 (for Q4 2016), Form 943, and Form 944 to IRS
  • Deposit 940 payments if undeposited FUTA tax is more than $500 on February 1, 2016

Deadlines for 1099-MISC Forms

January 31, 2019

  • Deadline to file when reporting non-employee compensation payments in Box 7
  • Deadline for providing contractors/ vendors with 1099-MISC copies

February 15, 2019

  • Due date for providing 1099-MISC statements to recipients if amounts are reported in Box 8 or 14

February 28, 2019

  • Filing deadline to IRS via paper if filing outside of Box 7 (Form 1096 must accompany all paper submissions)

April 1, 2018

  • E-filing deadline to IRS if filing outside of Box 7


Refer to KB article How will federal holidays affect my payroll processing? to know more about the holidays.

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