This guide covers: reconcile YTD totals, review benefits and imputed income, verify addresses and SSNs, finalize W-2/W-3, and finalize 1099-NEC/1096.
Reconcile YTD totals
What it does: Confirms the year-to-date payroll totals match what Payrollix will file — gross wages, federal withholding, FICA, FUTA, SUTA, state income tax.
Where: Accountant dashboard → Reports → Payroll Reports → Year-to-Date.
Steps:
- Open the Year-to-Date report for the year being closed.
- Compare YTD gross wages against the sum of each quarter's 941 Line 2 — the four quarters should add to the W-3 Box 1.
- Compare YTD federal withholding against the sum of 941 Line 3 — must equal W-3 Box 2.
- Compare YTD Social Security and Medicare wages and taxes (employee + employer) against the cumulative 941 lines 5a, 5c, 5d and W-3 boxes 3–6.
- Note any discrepancy and fix on the source payroll item or by issuing an amended 941 — see Amended returns.
Who: Accountant or SMB owner.
Notes: If the client started mid-year on Payrollix, confirm the YTD setup opening balances from the prior provider were entered before the first run.
Review benefits and imputed income
What it does: Confirms Section 125 (pre-tax) deductions, HSA/FSA contributions, retirement contributions, and imputed income (group-term life over $50K, personal use of company car) flow into the right W-2 boxes.
Where: Accountant dashboard → Deductions and Reports → Deductions.
Steps:
- Open the Deductions page and confirm every benefit deduction is set to Pre-tax if it should be (Section 125 health, 401(k), HSA).
- Open the YTD Deductions report and reconcile per-employee totals against the carrier or trustee statements.
- For imputed income items, confirm they were posted to the right payroll items so Box 12 codes appear correctly:
- Code C — group-term life > $50K
- Code D — 401(k) elective deferrals
- Code W — employer HSA contributions
- Code DD — employer health coverage cost
- Re-render a sample W-2 and confirm the Box 12 codes are present.
Who: Accountant or SMB owner.
Notes: S-corp >2%-shareholder health insurance (and HSA contributions) must be added to Box 1 wages but stay exempt from Social Security, Medicare, FUTA and SUTA. Confirm these amounts were entered for each shareholder before the last pay run of the year — if you book the full annual premium on the final check, do it there. See S-Corp >2% shareholder health & HSA for setup and tax treatment.
Verify addresses and SSNs
What it does: Catches typos that would cause an IRS / SSA match failure on the W-2 or 1099-NEC.
Where: Accountant dashboard → employee list and the W-2 report.
Steps:
- Open the W-2s report and review the employee block on each card — name, full address, SSN (rendered as
XXX-XX-XXXXmasked). - For each employee, confirm the address matches the IRS Form W-9 or W-4 on file.
- Use the SSA's BSO Social Security Number Verification Service (SSNVS) for any SSN that looks off — Payrollix does not match SSN/name automatically.
- Fix typos on the employee record. The W-2 regenerates from source on the next render.
Who: Accountant or SMB owner.
Notes: The PII captured during onboarding (W-4, I-9, state W-4 equivalents) sits on the employee record. If you find a missing form, send the employee a fresh signing packet from their profile.
Finalize W-2 / W-3
What it does: Generates the canonical PDFs, files with the SSA via EFW2, and unlocks them on the employee portal.
Where: Accountant dashboard → Tax Filings.
Steps:
- On the Tax Filings page, find the W-2 batch for the year.
- Click Generate. The system creates per-employee W-2 PDFs and the combined W-3 totals, archives both to S3, and queues the SSA EFW2 transmission.
- Watch the filing status flip from
draft→submitted→accepted. - Confirm employees can pull the form from the employee portal under Tax Documents.
- For prior-year corrections, see W-2 & 1099 distribution.
Who: Accountant or SMB owner.
Notes: The W-3 transmittal totals must reconcile to four quarters of 941s. If the diff is non-zero, fix on the underlying payroll item before generating — once the W-2 is filed, corrections require a W-2c.
Finalize 1099-NEC / 1096
What it does: Generates per-contractor 1099-NEC PDFs, files with the IRS via IRIS, and archives the 1096 transmittal copy.
Where: Accountant dashboard → Tax Filings.
Steps:
- On Tax Filings, find the 1099-NEC batch for the year.
- Confirm every contractor with $600 or more in nonemployee compensation is on the list — the threshold is auto-applied.
- Click Generate. The system creates per-contractor 1099-NEC PDFs, the 1096 transmittal copy, archives both to S3, and queues the IRIS submission.
- Watch the filing status to
accepted. - Contractors download the 1099-NEC from the employee portal under Tax Documents if they have a portal account.
Who: Accountant or SMB owner.
Notes: Some states require a direct 1099 filing even when the federal CF/SF program covers the IRS side — see State tax filing coverage for the per-state rules. For 1099 forms other than NEC (MISC, DIV, INT, R, B, G, W-2G), confirm with your accountant — those PDF templates are added as the IRS publishes them.
Related: W-2 & 1099 distribution · Tax & compliance reports · Amended returns.