Businesses have an obligation to provide W-2 Forms for all full-time employees and 1099 MISC forms for all contractors who work for them.
When they do this, they need to provide a summary of what they’ve done through Form W-3 or Form 1096 unless they’re filing their documents online.
Employers must send their employees their W-2 forms by January 31st of next year. All other forms mentioned so far must also be provided by this date.
It’s recommended that businesses aim to provide W-2 and 1099-MISC forms online so their employees can get their W2 forms as soon as possible.
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Does Your State have an Early Filing Date?
Due to the fact, W-2 and 1099-MISC forms are used to file both Federal and state taxes, you need to be aware that some states have early filing dates.
If you live in a state that has a filing date earlier than the set Federal date, you must conform to the earlier date. Make sure you prepare for this.
What are the Penalties for Late Filing?
There are filing penalties if you fail to provide W-2 and 1099-MISC forms in time. Penalties largely depend on what you did, whether there was intentional malice involved, or whether it was a simple error in judgment. The IRS will also look into your filing history.
Penalties may be charged per return, and the maximum level is determined by the IRS, so penalties can easily range into thousands of dollars.
How Can I File My Employees Forms Online?
If you want to make your life easier, you can also file these forms online. Come 2020, if you have more than 250 forms of each type to distribute, then you’re legally obliged to use an online filing method.
This is reduced to 100 forms of each type in 2021. And by 2022, any employer with more than 10 forms of each type must file online, so it’s wise to get started with this system now.
For W-2 forms, you should utilize the Business Services Online Portal, provided by the Social Security Administration. To begin filing 1099-MISC forms, the process is a little different. You should use the File Information Returns Electronically (FIRE) portal. You can also use a payroll service or your tax preparation software to do the same thing.
There are instructions on both systems that will guide you through the process.
What Else is Due in January?
As well as the forms detailed above, employers also must file two other payroll tax reports, which are also due by January 31st.
- Form 941 must be filed for the financial quarter, which is the quarterly tax form for employers.
- Form 940 also needs to be filed, which is your unemployment tax report.
This all sounds complicated, but there’s help out there for employers who need some guidance. Plenty of online tax preparation platforms have all the forms you need.
They come with detailed instructions, and all you have to do is enter the required information, and they’ll input the information into the relevant tax forms.
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