If you offer or purchase any of the following, your end of year tax filings may be impacted. Read on to ensure you're not adversely impacted. This information goes into W-2s and 1099s, including information about bonuses and benefits. It’s important to keep Homebase up-to-date with this information to ensure that tax calculations are done correctly, and that end of year forms are accurate so your employees and contractors don’t run into issues with their tax filings. These are some of the things that are important to make sure you’ve told us about:
Third party sick pay/short term disability insurance - Third party sick pay or short term disability insurance is insurance that an employer may get to pay an employee's wages when they miss work due to illness or non-work related injury. The amount of this coverage is paid by the employer and employee will impact what taxes the employee owes, which is why it’s important to ensure it’s reported properly on payroll.
Group term life insurance - Group term life insurance is a type of insurance where a contract covers multiple people, like in cases where an employer gets coverage for their employees. These amounts may be reported on W-2s depending on amounts and may impact an employee’s personal taxes.
Bonuses - Bonuses are often taxed at a different rate from regular income, and therefore need to be clearly differentiated in payroll to ensure they’re taxed properly. This is easy to do on your own using Homebase’s offcycle payroll flow.
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