1. Preparing for Year-End and 2012
As 2011 comes to a close we want to thank you for choosing Total Payroll Services for your payroll
needs. This guide has important information for planning the close of 2011 and the beginning of 2012.
We appreciate your timely attention to these matters. Advanced planning ensures an excellent finish to
a successful beginning!
TO ENSURE THE ACCURACY AND TIMELINESS OF YOUR W-2S,
PLEASE . . . . . . . .
COMPLETE AND RETURN THE ENCLOSED REPLY FORM ASAP!
Section 1 Section 2
Year-End Schedule Final Changes to 2011 Payroll
2011 will close with your last scheduled pay Records
date of the year. Please communicate and
submit the following by your last scheduled If changes that will affect your W-2’s are not
payroll: available with your final payroll (i.e. Third Party
Sick Pay), please request that your 2011 file be
 Fringe benefits placed on HOLD on the enclosed Reply Form.
Provide a description of the adjustment and we
 Year End Bonus Payments will advise you of any tax adjustments and
 Third Party Sick Payments assist you in preventing penalties for late
(See note on Reply Form) adjustments.
 Void/Manual checks – remember
If you do NOT place your file on HOLD we
checks issued in 2011 CANNOT be will begin processing your 4th quarter reports
VOIDED in 2012 and W-2’s within 48 hours of your last payroll.
 Missing/Incorrect Social Security Submitting changes or additional information
after this period will result in additional charges
Numbers and will delay the delivery of your employee
 Changes to employee addresses W-2’s.
 Group Term Life Insurance
With a “HOLD” in place, your W-2’s will be
 Taxable employer paid insurance processed within 3 business days after we are
 Qualified Pension Plan notified to take 2011 off hold.
Please refer to this guide to assist you in completing the enclosed
'Year End Reply Form'
 ACTION ITEM: Fax, email or mail completed Form to us ASAP - no later than:
FRIDAY, DECEMBER 16, 2011

2. SECTION 3
Fringe Benefits
The value of some non-cash fringe benefits must be considered income to employees. These benefits must be
reported on your 941 and your employees’ W-2. Examples of these benefits are: Personal use of company cars,
insurance premiums over $50,000, S-Corp insurance premiums, memberships, discounts, employer provided
vacations, and some gifts.
CAUTION: Taxes will be deducted from your employees’ pay check when you report Fringe Benefits. Please be
sure each employee has enough earnings to cover the taxes that will be withheld from each
employee’s paycheck.
SECTION 4
Bonus Payments
If you plan to process Bonus Checks please consider the following so that we can process all payments timely
and accurately:
 Will Bonus checks be processed as a separate payroll or as second checks with your regular payroll?
 Bonus payments processed as second checks must be dated with the same check date as first checks.
 Remember to consider year-to-date figures when deciding when to process and distribute bonus payments.
Consider the following for your bonus payments:
 Will you issue checks instead of direct deposit?
 Will taxes be handled differently - i.e. Fed. Withholding @ 25%? (IRS Supplemental Rate)
 Will voluntary deductions be deducted from bonus checks including 401(k)?
 Do you need an extra worksheet to prepare your bonus payroll?
 Will your Federal Deposit exceed $100,000.00? To avoid penalties, please contact us to arrange
for scheduling and funding.
SECTION 5
Third Party Sick Pay
Federal legislation requires the reporting of both taxable and non-taxable sick pay made to employees from
a Third Party, as well as taxes withheld on those payments. These payments must be included in your
Form 941 and on employees’ W-2. Total Payroll will produce and file all Employee Third Part Sick Pay
W-2’s unless you notify us in writing prior to your last pay of 2011 that you or your third party
administrator will be responsible for these forms. Additional charges will apply.
NOTE: These payments must be processed with or before your last payroll in 2011 to ensure that your 941
and W-2 reports are correct. Call your Third Party provider to request this information ASAP. If your
Third Party provider is unable to provide this information before your last payroll, you must call to delay
processing your W-2’s.
See Year End Reply Form
SECTION 6
Qualified Pension Plans – for Plans that are 100% Company Funded
IRS regulations require that an “X” be displayed in the box on the W-2 marked “Pension Plan” for all
employees who participated during any part of the year in a Qualified Pension Plan that is 100% company
funded (no employee deductions). This box will automatically display an “X” for any employees who have had
deductions from a deferred compensation plan (i.e. 401(k)). If you enter your payroll on our Evolution
software, please verify/change your employees’ W-2 Pension Status in the field called Pension (Employee-
Employee-W-2 tab). If we input your payroll, please make changes on the “W-2 Verification Report” and
send it to your Client Service Representative. See Year End Reply Form

3. Section 7
W-2’s
To reduce the possibility of incorrect W-2’s and to avoid penalties for incorrect or missing data (i.e.
incomplete addresses, name mismatches) we ask you to verify critical Company & Employee information.
Please review your copy of the W-2 Verification Report provided with your first payroll in December. This
report includes names, Social Security Numbers and mailing addresses of your employees. Please
contact your Client Service Representative if you did not receive this report.
Remember: The IRS may assess penalties on employers who report inaccurate information on 2011 W-2’s. The fine is
$50 per W-2 in error and can be doubled if the errors are attributed to “fraud and gross or intentional negligence.”
Total Payroll will file your Federal W-2’s (Copy A) electronically at no additional charge. You will receive a
confirmation notice of W-2 federal wages and taxes along with your other paper W-2’s (state, local, employee,
& file copies).
NOTE: If you are using our Tax Filing Service, in addition to the Federal W-2’s, we will also file State and
Local annual returns when required. See Year End Reply Form
SECTION 8
Archiving Historical Data for 2011 Records
Effective February 4, 2012 we will archive 2011 payroll files from our system. Since Federal and State laws
require your business to maintain complete payroll and employee information for up to 11 years (regulations
vary by agency and state), we are again providing our Annual EvoCD, which makes record retention and
accessibility easy, fast and convenient. Total Payroll Services will produce a searchable CD, which will
allow you to view/print every payroll report, every quarterly tax return, and every check stub for every
employee AND all W-2’s for the entire 2011 year. This CD will save you time, money and eliminate the
aggravation of lost or misplaced information. Fees for this service for 2011 will be $95.00 per Federal EIN.
Section 9
Preparing for 2012
Report Agency Changes – Between now and the end of January, federal and state agencies send
change notices. Please send these notices to us IMMEDIATELY! Examples of these changes include:
 Rate Changes – most states change Unemployment rates at the beginning of the year
 We need your new rate(s) ASAP to calculate the correct tax for your payrolls in the New Year
 Deposit Frequency – tax due dates may change due to changes in your business or government regulations
 Additional states or localities – please provide us with ID numbers and deposit requirements
 Notify us if you have ceased business in any State or Locality so we can finalize reporting and cease
billing for the tax entity
Please send us all agency notices of change as soon as you receive them – do not wait until next
year. If we do not receive these notices we will be unable to make accurate, timely payments and you
will be liable for any associated penalties and costs for filing corrected or amended returns.
ACT 32 - Effective with your first pay in January your employees' Earned Income Tax will be based on
the higher tax rate between where they work and where they live. Please contact your CSR if you have
not yet provided the work location (physical address) for all your employees.
Social Security Wage Base - The Social Security Wage base will increase to $110,100 for 2012; Total
Payroll Services will update this and all Federal, State and Local tax rates, wages and limits for 2012.
Our annual file update fee will appear on your first invoice of 2012.
Everyone at Total Payroll sincerely thanks you for the opportunity to be your partner. We wish you and your family a
happy holiday season. As always, we look forward to serving your business needs during 2012!
To reduce the possibility of incorrect W-2’s and to avoid penalties for incorrect or missing data (i.e.
incomplete addresses, name mismatches) we ask you to verify critical Company & Employee
information.
Please review your copy of the W-2 Verification Report provided with your first payroll in December. This

4. EMPLOYEE SOCIAL SECURITY NUMBER VERIFICATION
AVOIDING PENALTIES FOR NAME MISMATCH
Every year, the Social Security Administration (SSA) is unable to post 3-4 million W-2’s due to individual name or
Social Security Number (SSN) mismatches. Because the annual reporting of W-2 data posts to an individual’s
earnings history and since this earnings history is used to determine the individual’s Social Security benefits, W-2
errors can have a significant impact on the individual’s Social Security benefits. Imagine going to your local SSA
office to apply for benefits only to find out that the money you were counting on is either not available or substantially
less than you had anticipated!
In addition, the SSA and Internal Revenue Service may assess penalties on employers who report inaccurate
information to the SSA on the W-2’s. The fine is $50 per W-2 and can be doubled if the errors are attributable to
“fraud and gross or intentional negligence”.
What can you do to help your company and your employees??
1. Ask your employees to verify that their name and social security number on their paycheck matches their Social
Security card exactly
2. Use our check stub message or insert a memo in each payroll envelope
3. Ask to see the employee’s Social Security card for all new hires
If the card is incorrect for any reason including marriage, legal name change, etc., your employee should
contact SSA to have their records updated. The employee can call 800/772-1213 and request form SS-5
** Always use the name on the original card until a new card is shown **
4. Request to see the Social Security card for any names that appear to be incorrect:
 Question any shortened names. Sam Smith’s legal name could be Samuel Smith
 Does the employee’s name include his middle name? Sam Smith could be registered as Samuel Lee Smith
 Verify that the name is not an alternate of another name - (e.g. Betsy for Elizabeth)
5. Hyphens
Do not join compound surnames into a single word or separate with a space. A compound last name should be:
Susan B Smith-Johnson or Maria E Rodriguez-de-Perez
6. Do not separate a prefix from the rest of the name. Use an apostrophe or attach the prefix to the rest of the last
name
A name with a single letter prefix should look like this: Anthony D’Angelo or Anthony DAngelo
A name with a multiple letter prefix should look like this: Leonardo DaVinci or Leonardo Da-Vinci
 SSA recognizes the following prefixes and expects to find a name attached to them:
Da De Di Do Du El La Le Lf Li Lo Mc Mt St Bon El Der Las Los Mac Mte San Sta Ste
Van Ver Von Dela Vande Vonde Vonder Vander
7. Do not show titles or academic degrees at the beginning or end of the employee’s name
(e.g., Mr., Mrs., Dr., Capt., Rev., MD or PhD)
8. Do not use Jr., Sr., or a numerical suffix (e.g., III, IV)
In addition to the steps above the SSA offers a free verification service called Enumeration Verification Service (EVS)
to verify the employee names and the SSN you were given. You can verify a limited number of employees by calling
(800) 772-6270 or register online at http://www.ssa.gov/employer/ssnv.htm .
Total Payroll Services also offers a Social Security Number Verification Service which verifies that your employee
names and Social Security numbers match Social Security Administration’s (SSA) records. We provide two types of
verification services:
1) We do a one time validation of all Active employees on your payroll records
2) We validate new employees each payroll when you add them to your payroll records
For more information and costs for our Social Security Number Verification Service,
please contact your Client Service Representative