Sage 50 refers to the payroll tax year as the calendar year in which payroll transactions take place. Sage 50 keeps two years of payroll activity open at one time. For tax purposes, the payroll tax year must coincide with the calendar year. Closing the payroll tax year not only closes the payroll information; it also closes vendor 1099 information. Therefore, all payroll reports, payroll forms, and 1099 forms must be printed before closing the payroll tax year.
Prepare quarterly payroll reports
Prepare annual payroll reports
When to Close the Payroll Tax Year
Usually there is no need to close a payroll tax year exactly at the end of each calendar year. For example, if 2016 is the first of the two years, you do not need to close this payroll tax year until the end of 2017. On the other hand, if 2016 is the second of the two payroll years, you must close the 2015 payroll tax year before you can enter 2017 payroll transactions.
We highly recommend that you wait to close the first payroll tax year until all payroll reports, W-2 data, and 1099 data are finalized following the first quarter of the second payroll tax year. If there are mistakes in employee earnings or W-2 data, you have an opportunity to correct them.
If you are unsure as to what two payroll years Sage 50 is operating in, you can quickly find out in the Change Accounting Period window.
Note: If your company's fiscal year matches the calendar year, you must close the payroll tax year prior to closing the fiscal year.
To Close the First of Two Open Payroll Tax Years
- From the Tasks menu, select System, then choose Year-End Wizard. Sage 50's Year-End wizard prompts you for completion of any uncompleted year-end tasks. The wizard will remind you to print any journals, reports, payroll checks and forms you may have neglected to print. It will also prompt you to back up your data if you have not already done so. Tell me more about the year-end wizard.