Tips for Helping Your Employees with Tax Season

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There is little doubt that tax season can be one of the most stressful times of the year. Taxpayers are anxiously gathering essential documents, filling out forms, and scheduling appointments with accountants. 

Your employees are no different. They are eagerly awaiting the delivery of their W2 forms so they can file their returns and hopefully get a refund. Some of your staff might even have plans on how to spend their money. 

To make your employees happier, you should use the following tips to help them prepare for the upcoming tax season. 

Create a System  

Whether you have a small business or a large corporation, you should create a streamlined process to organize and distribute W2s. An agreed-upon process not only ensures that your employees receive their forms in a timely manner but can help your HR staff avoid mistakes like missing or late W2s.  

If you have employees that need a revised or reissued W2, a set procedure can also make sure that it happens quickly and efficiently. Then your employees can still receive their new W2s on time and not have to file for an extension when preparing their returns. 

Once your process has been set in place, you should take the time to educate your HR department on how to use it. Since they are the driving force behind the process, they should understand the reasons behind it and the benefits of using it. 

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Communication is Key 

With the added pressure of tax season, employees will have shorter attention spans than usual and might not have the time for lengthy memos about the W2 process. To help keep an open communication channel, focus on using simple and short emails to notify staff. You should also avoid using tax jargon and static forms of communication like letters or flyers. 

Emails should be sent multiple times to ensure that everyone has absorbed the information. It would be best if you also tried to keep the messaging as consistent as possible to cut down on any confusion. 

When explaining the new process, you should only give your staff the basics. Don’t inundate them with unneeded details. Just let them know where and when they can expect to receive their W2s. This way, they can begin to plan out their tax returns and schedule any necessary appointments. 

If employees have questions about the process, elect one HR team member to be a liaison to answer all questions and concerns. This can help prevent misinformation and uncertainty about the process amongst staff.  

Distribute Through Multiple Channels 

Nowadays, more businesses are offering remote positions for their employees. While remote work is an excellent benefit to your staff, it can make it difficult for distributing W2s. To help speed up the process, consider offering the form through various channels. 

Some payroll services offer a downloadable W2 through an online portal, which can create a quicker distribution process for on-site and remote employees who don’t want to wait for their mailed W2s. 

When first deploying the online portal, confirm that all employees understand where to find the form and how to download it. Deliver their account information in a written format, so that your staff can refer back to instructions when logging on for the first time. 

For employees that want the physical form in hand before preparing their taxes, offer them the chance to collect their W2s in person, instead of mailing it to their homes. Then you can use this meeting time to receive any new personal information from your staff, like a change of address or surname.  

Remind Staff to Prepare Ahead of Time

One of the best ways to ensure a smooth tax season is to prepare for it ahead of time. To help promote this mindset, consider hosting financial literacy classes before tax season begins. 

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If available, teach your staff about the resources they have, such as financial counseling, debt management, or retirement planning. If your company uses a local accounting firm, consider creating a partnership with them to offer discounted services to your staff.  

For more tax specific help, communicate with your staff about their options for tax deductions and credits. Information on deductions is especially helpful for remote employees, who could qualify for a home office deduction. 

You can also remind your staff to contribute more to their 401Ks to help reduce their amount of reportable income. Charitable donations can also help employees earn tax credits to use on their returns. 

For staff expecting to have taxes owed on their return, advise them to set aside money to pay to the IRS. Online bank accounts can help your employees grow their savings automatically, helping them set aside money for tax season efficiently. They won’t have to remember to transfer funds over each week. And setting aside money can prevent them from having to panic about a large tax bill due in April.

Help Employees with Their W4s 

When a new hire starts work, make sure to offer assistance on filling out their W4 forms. The number of allowances they claim on their form will dictate the amount of money they take home each pay period. 

If your staff claim too many allowances on their W4s, they might struggle with a larger than average tax bill when they file their returns. Employees with too few allowances could have too tight of a budget and might struggle to pay their bills throughout the year.  

Once a year, offer employees the opportunity to update their W4s. The IRS provides a great tool to help them calculate the correct amount of allowances to claim. 

Tax season is a tough time of the year, and your employees’ financial stress can affect their work life. By encouraging them to prepare for it, you can create a company culture of financial wellness. 

Helping your employees with tax preparation is also more than just beneficial to them. You can increase their job satisfaction, loyalty, and productivity, all while providing financial education. Become a better manager, and start offering your employees help with this tax season today.

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