Here’s what to expect from the upcoming end-of-year (EOY) tax reconciliation payrolls and how they may impact your company.
A tax reconciliation is a special payroll run that ensures the correct amount of taxes is paid and reported - especially when new information changes tax amounts after payroll has already been processed. Depending on the adjustment, you may see either a debit (additional taxes owed) or a refund (extra funds held by Bob).
Tax reconciliation activity may show directly on your company bank statement:
- Debits appear as "TAX"
- Credits or refunds appear as "TXP"
You may see reconciliation activity on the following dates:
- A December 28 reconciliation will debit on January 4
- A January 2 reconciliation will debit on January 7
- A January 4 reconciliation will debit on January 7
State-specific reconciliations may also run once filings begin in mid-January, though these do not apply to all companies.
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