Before closing December, check withholding instructions and paychecks, compensation totals, deposit reporting support, and the employee and agency reporting copies.
December payroll close checklist: records to check first
A paycheck should include taxes withheld from the most recent pay period and for the entire year so far, according to USAGov. The six checks for reporting records are:
- Pay period withholding records
- Year to date withholding
- Payroll reporting totals
- Deposit reporting support
- Employee copy deadline
- Agency reporting copies
Gather the latest payroll stubs and withholding instructions, then record where each reporting total and required copy is supported.
Key takeaways for what payroll records should i check before closing december?
The six checks connect your payroll records to specific reporting requirements. First, verify pay period withholding records and year-to-date totals using pay stubs, which should include taxes withheld from the most recent pay period and for the entire year so far, according to USAGov. Second, distinguish employee withholding from employer contributions. Form 941 reports income taxes, Social Security tax, and Medicare tax withheld from an employee’s paycheck, plus the employer’s portion of Social Security and Medicare tax, according to Intuit.
Third, check payroll reporting totals and deposit reporting support. You must report taxes you deposit by filing Forms 941, 943, 944, 945, and 940 on paper or through e-file, according to Internal Revenue Service. This distinction matters because depositing taxes does not automatically satisfy the reporting requirement; separate filings are needed. Fourth, confirm the employee copy deadline. Forms W-2 are required to be furnished to employees and filed with SSA by January 31, according to Internal Revenue Service.
Before close: gather withholding instructions and pay stubs
Start the December close by collecting the source documents that establish how much tax was withheld from each employee’s pay. You need the employee’s Form W-4, Employee’s Withholding Allowance Certificate, and the withholding tables in Publication 15, (Circular E), Employer’s Tax Guide, because the employer uses these specific records to figure out how much to withhold, according to Intuit. These instructions define the baseline for your withholding calculations. Without the correct W-4 and the corresponding Publication 15 tables, you cannot verify if the amounts taken from pay align with the employee’s specific allowance certificate.
Next, pull the pay stubs for the latest pay period. Read your paycheck to see how much federal tax your employer withheld, as advised by USAGov. The paycheck is the primary evidence of the actual deduction made from the employee’s earnings. It should include taxes withheld from the most recent pay period and for the entire year so far, according to USAGov. This dual view is critical for the December close. You need to see the single-period amount to check the current liability, and you need the year-to-date total to prepare for annual reporting.
Gather these documents before you run any final payroll calculations. The Form W-4 and Publication 15 tables provide the rules for the calculation, while the pay stubs provide the resulting numbers. Compare the withholding shown on the paycheck against the amounts derived from the W-4 instructions. If the paycheck shows a year-to-date total, verify that it accumulates correctly from the previous months. This step ensures you have the raw data needed to distinguish between employee withholding and employer contributions later in the close process.
Keep the Form W-4 and the Publication 15 withholding tables separate from the pay stubs in your file. The W-4 is the instruction document, and the Publication 15 tables are the reference guide used to interpret those instructions. The paycheck is the output. By gathering all three, you create a complete evidence trail for the withholding portion of your payroll liabilities. This preparation allows you to move to the next stage of the close with confidence that the underlying withholding data is documented and accessible.
During close: check compensation and payroll reporting totals
Verify that your quarterly payroll totals separate employee withholding from employer tax portions before finalizing the close. Form 941, Employer’s Quarterly Federal Tax Return, is used to report income taxes, Social Security tax and Medicare tax withheld from an employee’s paycheck and the employer’s portion of Social security tax and Medicare tax, according to Intuit. Keep these two categories distinct in your working papers so the total liability matches the sum of withheld employee amounts and the employer’s matching contributions.
Confirm that your business meets the criteria for quarterly reporting. In general, employers who withhold federal income tax, Social Security or Medicare taxes must file Form 941, Employer's Quarterly Federal Tax Return, each quarter, according to Internal Revenue Service. If your payroll records show withholding activity for the quarter, the Form 941 totals must reflect both the employee and employer sides of the tax calculation.
Reconcile the annual compensation figures against the individual employee records. At the end of the year, the employer must complete Form W-2, Wage and Tax Statement, to report wages, tips and other compensation paid to an employee, according to Internal Revenue Service. Match wages, tips and other compensation on Form W-2 to year-to-date payroll records.
Record where each reporting total is supported by the underlying payroll data. Verify that the Social Security and Medicare tax amounts in your Form 941 preparation match the sum of employee withholdings and employer portions. Confirm that the wages, tips and other compensation figures on the Form W-2 statements correspond to the year-to-date payroll records. Note any discrepancies between the quarterly tax return totals and the annual wage statements for follow-up review.
Check that the employer’s portion of Social Security and Medicare tax is included in the Form 941 reporting totals. The Form 941 captures the employer’s portion of Social security tax and Medicare tax alongside the withheld employee amounts, according to Intuit. Ensure your close documentation clearly identifies which amounts are withheld from paychecks and which are added by the employer.
After close: identify employee and agency reporting copies
Once the December payroll entries are recorded, identify the specific copies of Form W-2 required for each recipient. The Internal Revenue Service requires that Forms W-2 be furnished to employees and filed with the Social Security Administration by January 31, as stated in Depositing and reporting employment taxes | Internal Revenue Service. This deadline applies to both the employee copy and the agency filing.
File Copy A of all paper and electronic Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, to the Social Security Administration (SSA), according to Internal Revenue Service. Ensure the Form W-3 is prepared alongside the individual wage statements to complete this agency submission.
File Copy 1 to an employee’s state or local tax department, according to Internal Revenue Service. Verify that the correct state or local jurisdiction is identified for each employee before sending this copy.
Electronic information-return filing is not required unless the filer must file at least 10 returns during the calendar year, according to Cornell Law School. Electronic filing is not required unless the person is required to file at least 10 information returns during that calendar year.
Record the January 31 deadline in your close calendar. Gather the required copies and confirm the filing method based on your total return count before the deadline passes.
Payroll reporting reference table by publisher
The table below maps each publisher to the specific payroll record instruction or deadline it supplies.
| Publisher | Record or Form | Instruction or Deadline |
|---|---|---|
| Intuit | Form W-4 and Publication 15 | The employer uses the employee’s Form W-4, Employee’s Withholding Allowance Certificate, and the withholding tables in Publication 15, (Circular E), Employer’s Tax Guide, to figure out how much to withhold, according to Intuit. |
| Internal Revenue Service | Publication 15 | To determine your payment schedule, review Publication 15 for Forms 941, 944 and 945, according to Internal Revenue Service. |
| Internal Revenue Service | Form 941 | In general, employers who withhold federal income tax, Social Security or Medicare taxes must file Form 941, Employer's Quarterly Federal Tax Return, each quarter, according to Internal Revenue Service. |
| Internal Revenue Service | Form W-2 | At the end of the year, the employer must complete Form W-2, Wage and Tax Statement, to report wages, tips and other compensation paid to an employee, according to Internal Revenue Service. |
| USAGov | Paycheck | It should include taxes withheld from the most recent pay period and for the entire year so far, according to USAGov. |
| Drake Software | Form W-2 | January 31 is the deadline to file Forms W-2 using Business Services Online or to submit paper Form W-2, according to Drake Software. |
Verify each row against your current payroll records before proceeding to the next close step.
Blank December payroll evidence checklist
Note the source that supports each reporting total and each required copy. Fill in the source document name and mark the status as you verify each item. The paycheck should include taxes withheld from the most recent pay period and for the entire year so far, according to USAGov.
Record the specific file or page where you found each figure. Note if a total is missing or if a copy is not yet generated. Keep the worksheet with your close files for reference.
FAQ: December payroll records and reporting dates
What belongs on a December payroll close checklist?
Your checklist should verify six specific items: pay period withholding records, year-to-date withholding, payroll reporting totals, deposit reporting support, the employee copy deadline, and agency reporting copies. These checks ensure you have the necessary documentation for both employee distribution and agency filing. Use this list to confirm each reporting total and required copy is supported before you finalize the close.
Which withholding amounts should my payroll records show?
Your records should show the taxes withheld from the most recent pay period and for the entire year so far. Pay stubs are the primary source for identifying these specific withholding amounts. Ensure your payroll records clearly distinguish between the current period's withholding and the cumulative year-to-date figures.
Does the quarterly Form 941 requirement apply to my business?
This requirement applies to most businesses that withhold these specific federal taxes. Confirm whether your business withholds these taxes to determine if the quarterly filing applies.
When must employees receive Form W-2?
Forms W-2 are required to be furnished to employees and filed with the Social Security Administration by January 31, according to Internal Revenue Service. If this date falls on a Saturday, Sunday, or legal holiday, the deadline will be the next business day, according to Drake Software. January 31 is also the deadline to file Forms W-2 using Business Services Online or to submit paper Form W-2, according to Drake Software.
Does depositing payroll taxes also satisfy the reporting requirement?
No, depositing taxes does not satisfy the reporting requirement on its own. Keep deposit reporting separate from determining the payment schedule to ensure both actions are completed.