Year End Reporting Forms and Your Business

Business, Lifestyle

Generally, established businesses understand the ins and outs of tax reporting for traditional employees. But when it comes to independent contractors , many organizations can still fumble for the right ways to report key data to the IRS.

Greatland Corporation, one of the country’s leading providers of W-2 and 1099 products, wants all organizations to understand the importance of filing, the penalties of not filing on time or at all, and what such missteps can mean for your employees and contractors.

Filling 1099-MISC forms is vital for any business, and attention to detail is key, as penalties for failure to file or filing inaccurate information have increased in recent years. Businesses who pay $600 or more per year to an independent contractor are required by the federal government to send forms to workers no later than January 31, 2018.

Last year, a change was made mandating that businesses send W-2 and 1099-MISC forms to the federal government on or before January 31, regardless of method (paper or e-file). This change meant moving the deadline up months for many filers and will again result in an increased workload over a shorter period of time for tax year 2017. Not only was the due date to the federal agencies accelerated, but many states have also begun to require earlier filing which means an increased time crunch to meet all applicable deadlines.

If you know you will not have filing done on time, businesses can request a 30-day extension to file 1099s by submitting Form 8809 Application for Extension of Time to File Information Returns to IRS.  An automatic 30-day extension is no longer available for W-2s.  The IRS will grant an extension for W-2 filing only in cases of extraordinary circumstances or catastrophe.

Keep in mind that if your business requires you to file 250 or more informational returns, e-filing is required by the IRS and Social Security Administration (SSA). E-filing is much less cumbersome than paper filing and could help you save time, regardless of the number of forms.  However, those with fewer forms to file are still allowed to use paper if preferred.

There are penalties in place for businesses who do not file W-2s and 1099s on time or who do not furnish correct payee statements.  Those fines are as follows:

  • $50 per information return if you correctly file within 30 days; maximum penalty $536,000 per year ($187,500 for small businesses).
  • $100 per information return if you correctly file more than 30 days after the due date but by August 1; maximum penalty $1,609,000 ($536,000 for small businesses).
  • $260 per information return if you file after August 1 or you do not file required information returns; maximum penalty $3,218,500 per year ($1,072,500 for small businesses).
  • If any failure to file a correct information return is due to intentional disregard of the filing or correct information requirements, the penalty is at least $530 per information return with no maximum penalty.

Odds are, your business wants to continue working with the contractors that you have built relationships with over the years. These relationships represent another reason to be sure to file on time. If contractors receive late forms, they may be unable to file their own taxes on time, which could leave them upset and potentially harm future business opportunities.

Additionally, it is vital to also think about your employees. If you are late in furnishing W-2 forms or forget to file, employees become upset because they are unable to file their own taxes thereby delaying potential refunds. It is best to be prepared early. Know your deadlines, know the penalties associated with incorrect or late filing and know the needs of your contractors and employees to make a hectic time of year a little less chaotic.

About Greatland

Greatland (www.greatland.com) is the W-2 and 1099 specialist, focused on providing information, products, and solutions for small to mid-size businesses and accountants.  Greatland helps customers navigate annual reporting changes, including extensive expertise in ACA reporting. Through Greatland’s subsidiaries – Greatland, Nelco, and Broker Forms – the company offers an extensive array of specialized products for businesses: W-2 forms, 1099 forms, 1095 forms, W-2, 1099, and 1095 software, online filing, business checks, presentation materials, income tax preparation supplies, and mortgage forms. Greatland is an employee-owned company with locations in Grand Rapids, Mich. and Green Bay, Wis. Follow us on Facebook or Twitter: @GreatlandCorp

SOURCE Greatland

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