Year End Check for W-2's
As the year winds down, most business owners are focused on closing out schedules, finishing strong, and gearing up for the new year.
But there’s one small step that often gets overlooked, and skipping it can create a major headache once tax season arrives.
Before W-2s are issued, take a few minutes to review your paystubs.
It’s a simple check that can save you time, frustration, and costly corrections later.
This Matters More Than You Think
Once W-2s are mailed, any payroll mistakes become harder and more expensive to fix. Corrections mean amended filings, additional payroll work, and delays for you and your team.
A quick review now helps ensure:
Pay amounts match what you expected
Retirement contributions were withheld correctly
Benefit deductions are accurate
Payroll taxes were applied as expected
Bonuses or special payments are processed properly
Even if nothing seems “off,” this quick step gives you confidence that your year-end payroll is clean before the forms land in employee hands.
What to Check on Your Paystubs Before Year-End
You don’t need to be a payroll expert. Just glance at these key areas:
✔ Gross Pay
Does your salary, hourly rate, and any bonuses match what you expected this year?
✔ Retirement Contributions
Are 401(k) or other retirement contributions showing correctly and matching your elections?
✔ Benefits & Deductions
Do health insurance, HSA, or other deductions look right?
✔ Payroll Taxes
Are federal and state withholdings consistent with prior pay periods?
✔ Year-to-Date Totals
Do the YTD numbers align with what you believe you earned and contributed this year?
If something looks off, now is the time to flag it.
Don’t Forget About Washington’s Tax Changes for 2025
In addition to payroll checks and W-2 prep, practice owners in Washington should be aware of significant tax law changes that took effect late in 2025 under ESSB 5814.
This law expanded Washington’s retail sales tax and Business & Occupation (B&O) tax to include a wide variety of services that previously weren’t taxed — including things like temporary staffing, advertising services, and certain digital services.
This means if your practice or business sells services such as:
Advertising or marketing services
Temporary staffing services
Live presentations or workshops
Custom software or website development
IT services
…you may now be required to collect and remit retail sales tax on those sales, even if they weren’t taxable in years past.
While this may not directly impact typical medical or dental treatment revenue, it could affect billing for things like practice consulting services, education events, or digital-delivery offerings; so it’s worth reviewing now while you’re doing your year-end tax checklist.
Why Issues Get Missed
Especially in busy practices and growing businesses, payroll runs on autopilot until it doesn’t.
Common reasons issues slip through:
Payroll systems weren’t updated after compensation changes
Retirement elections weren’t processed properly
Bonus payments were coded differently
No one reviews paystub details regularly
How a Fractional CFO Helps
At Balanced CFO, we help business owners set up the right payroll checks and balances so errors are caught early, not at tax time.
That includes:
Reviewing payroll reports quarterly or monthly
Ensuring deductions and contributions are recorded correctly
Checking for compliance with new tax laws like ESSB 5814
Coordinating payroll with your financial planning and taxes
The goal is simple: fewer surprises and smoother tax seasons every year.
A Quick Year-End Reminder
Before W-2s go out, take 10 minutes to:
✔ Review your latest paystubs
✔ Check deductions and contributions
✔ Make corrections before W-2s are finalized
✔ Stay aware of new tax requirements like those under ESSB 5814
These simple steps now can save hours of work later — for you and your team.
If you’d like help reviewing payroll or understanding how recent Washington tax changes could affect your practice, Balanced CFO is here to help.
