Here’s What’s on the Radar for Your 2016 Tax Filings: The 1099 and W-2 Filings’ Edition
By Jaime Lizotte, HR Solutions Manager at ComplyRight, Inc.
While filing your 2016 taxes may not be top of mind right now (holiday season for retailers!), it’s not too early to familiarize yourself with what’s new. Like in years past, the IRS has made some substantial changes that will affect your 1099-MISC and W-2 filings for independent contractors and employees. Knowing these changes now will help you better plan for, and act on, your filings later (after the holiday rush).
Depending on which forms apply to your business, you should be aware of these 2016 changes:
Most important, the deadline for filing the 1099-MISC has changed – significantly.
- If entering data in Box 7 (non-employee compensation): The form must be filed with the IRS by January 31, 2017 regardless of whether using paper or filing electronically. This earlier filing date is a big deal because the previous e-file date was March 31 – two additional months.
- If no data in Box 7: You have until February 28, 2017 if using paper, and March 31 if filing online.
Keep in mind the due date for distributing recipient copies remains the same. Your independent contractors must receive their copies of the 1099-MISC by the same deadline you’re used to: January 31, 2017.
Now onto the W-2 …
The IRS has made a handful of changes to Form W-2, too. They are:
- New deadline: All 2016 W-2 forms must be filed with the Social Security Administration (SSA) by January 31, 2017 regardless of whether you use paper or file online. Again, the previous e-file date was later, March 31.
- Different W-2 extension process: Extensions to file with the SSA are no longer automatic. For filings due on or after January 1, 2017, one 30-day extension may be requested. However, you must use application Form 8809, and you must provide a detailed explanation of why you need more time. The IRS has stated it will only grant extensions in cases of “extraordinary circumstances or catastrophe.”
- Steeper penalties: Finally, penalties have increased for failure to file correct W-2s by the due date, intentional disregard of filing requirements and failure to furnish W-2s to employees. The amount of the penalty is based on when the correct W-2 is filed:
- $50 per W-2 if the forms are correctly filed within 30 days of the due date (Maximum penalty: $532,000 per year, $186,000 maximum for small businesses)
- $100 per W-2 if the forms are correctly filed more than 30 days after the due date but before August 1 (Maximum penalty: $1,596,500 per year, $532,000 maximum for small businesses)
- $260 per W-2 if the forms are filed after August 1, corrections are not filed or the W-2 is not filed at all (Maximum penalty: $3,193,000 per year, $1,064,000 maximum for small businesses)
When you consider the fact that these new penalties are per error, per form, you can see how quickly they’d add up. Now, more than ever, you need to be on-time and accurate with your W-2 filings.
From awareness to action
Knowing the latest IRS changes is an important first step. But how will you handle the actual work of completing your filings? Consider an online solution like eFile4biz.com for quick, efficient and secure e-filing of your 1099s and W-2s. There’s no software to download and no forms to purchase, so you’ll enjoy streamlined, one-step processing.
ComplyRight is the employer’s most helpful partner in navigating the complexities of regulatory compliance. We make it easy by applying out expertise to deliver timely and reliable products, services and information. Through these efforts we fulfill our passion for helping our customers succeed. Our family of brands includes HRdirect, PosterTracker, eFile4Biz.com and TrackSmart.