Congress recently enacted legislation changing W-2 and 1099-MISC filing dates for tax year 2016.
For this filing year, all W-2s and 1099-MISC forms need to be filed with the Social Security Administration before January 31, 2017.
In essence, the IRS and taxpayers will be on the same Jan. 31 schedule.
The purpose behind the tighter deadline is to allow the IRS to match W-2s and W-9s with tax returns as they’re filed to reduce tax fraud and identity theft. It’s a good change, but one that most employers are unaware of.
Previously, the filing deadline for W-2s with the SSA had been the last day in March, if filed electronically. But the IRS wasn’t very strict about that deadline.
In 2017, not only will the deadlines be enforced, there will also be a $250 penalty for each form that’s filed after Jan. 31, 2017. Keep in mind, if you have one W-2, you also have to issue one W-3, so that’s two $250 penalties.
Just a reminder—your employees have to fill out a W-4 form, and your contract service providers fill out a W-9. (If the contractor was paid less than $600 total, you don’t need to report it, unless they’re an attorney.)
With these new deadlines, it’s now more important than ever to be prepared by year-end for W-2 and 1099-MISC processing. Make sure you’re following these best practices:
- Before paying any vendor, require them to complete Form W-9. Obtaining vendor information up front ensures you have their information during 1099 preparation.
- Starting now and through December, review your vendor files to ensure you aren’t missing any data such as a legal name, address, employer identification numbers or Social Security numbers.
- Review your employee files for missing addresses and Social Security numbers.
- Request updated addresses from employees in December so W-2’s will be mailed to the correct address.
- URGENT: If you don’t have W-9s for all your contractors, get them. This week.
I can’t stress how important it is to make sure you have complete and accurate W-9 and W-2 forms. That’s true every year, but the updated due date means you’ll need to have all your information together sooner than you may be used to. Those fines will add up quickly.
If you’re unsure of your paperwork, block our time this week to gather those forms from all your contractors and employees. Want to talk to someone about what you need to prepare? Give us a call; we’d be happy to help.