Now is the time to finish up these year-end tasks if you haven’t already!

• Confirm employee addresses for W-2 delivery.

• Gather health insurance coverage information for W-2s. If your business files 250 or more W-2 forms, you’re required to include the cost of group health insurance in Box 12. This includes both employer- and employee-paid premium amounts. This is information reporting only and does not affect an employee’s taxable income.

• Gather group term life insurance coverage amounts for W-2s. The cost of employer-paid coverage over $50,000 should be included as taxable income. For more information, see IRS Publication 15-B, page 13.

• Identify your employees who are eligible for a company-sponsored retirement plan such as a 401(k). If the employee received any contributions or forfeitures from the plan, be sure the “Retirement Plan” box is checked on his/her W-2. This impacts the employee’s ability to make a tax-deductible contribution to an IRA. For more information on the circumstances under which an employee is considered covered under a workplace retirement plan, click here.

• If you paid any independent contractors during 2024, report those payments on Form 1099-NEC.

• If you have any employees who claimed “Exempt” from federal tax withholding in 2024, they’ll need to complete a new Form W-4 by February 15, 2025 to continue that status. In order to qualify for exempt status, an employee must have had no tax liability for the previous year and expect to have no tax liability for the current year.

If Kindred CPA is preparing your Forms W-2, we’ve probably already asked you these questions, but if you realize there’s something missing in the information you provided, please let us know as soon as possible.