At year-end, what is the primary report employers need to prepare for payroll tax purposes?

The primary report employers need to prepare for payroll tax purposes at year-end is Form W-2. This form is crucial because it summarizes an employee's annual earnings and the taxes withheld from their paycheck throughout the year. Employers are required to issue a W-2 to each employee by January 31 of the following year, reflecting wages earned and tax withholdings for federal, state, and local purposes.

Form W-2 is not only a critical document for employees when they file their income tax returns, but it also serves as a reporting tool for the Social Security Administration (SSA) and the IRS, ensuring that employees' earnings are correctly tracked for tax purposes and that social security credits are accurately calculated. This makes it an essential component of payroll reporting at year-end.

While documents like profit and loss statements and audit reports are useful for business operations and financial health assessments, they do not specifically address payroll tax obligations. An employer tax report might also be relevant, but it typically focuses on the employer's tax liabilities rather than the individual employee's contributions and earnings. Thus, Form W-2 stands out as the key document needed to comply with payroll tax reporting requirements at year-end.