Form 1099 Deadline and Form W-2
December 2016
The purpose of this article is to remind our readers that the 1099 and W-2 deadlines for filing are looming.
The 1099 and W-2 deadlines are:
January 31 – Send Forms W-2 and 1099 to individual recipients
February 28 – Send Forms W-3 and 1096 (and W-2s and 1099s) to IRS/SSA
W-2/W-3
Form W-2 is filed by an employer to report wages and tax with holdings of an employee (including household employees) to both the employee and the Social Security Administration. Form W-2 relates to an employer/employee relationship only and should not be issued to independent contractors (they should receive a Form 1099).
Copies of W-2s are also sent to the Social Security Administration. They are accompanied by a Form W-3, which serves as a summary sheet that totals the amounts reported on the individual forms W-2. Form W-2 can be found here and Form W-3 can be found here.
1099/1096
Form 1099 exists in a variety of forms and is filed by payers to report various types of payments to both the payment recipient and the IRS. Only payments made in the course of the payer’s trade or business are reportable on Form 1099. One of the most common forms in the 1099 series is Form 1099-MISC it is used to report combined annual payments to a single recipient of $600 or more for rents, services (including parts and materials), prizes, awards, medical and health care payments, crop insurance proceeds, and other income. Payments made to incorporated entities do not require a Form 1099-MISC, other than incorporated law firms. It should be noted that payments for services made to Anchor CPA Firm, may trigger a 1099 filing requirement if the payment was for at least $600 and was made in a trade or business context.
Other select Forms in the 1099 series and their purposes include:
| Form | What the form reports |
| 1099-INT | Interest |
| 1099-DIV | Dividends |
| 1099-C | Cancellation of Debt |
| 1099-R | Distributions from Pensions, Annuities, Retirement Plans, IRAs, or Insurance Contracts |
Copies of Forms 1099 are provided to the IRS in addition to the recipients.
Penalties for late filing
Penalties for late filing range from $30 to $100 per form for unintentional failures. The penalty can reach $250 per form if failure is deemed intentional. A couple years ago the IRS added two new questions to business income tax returns they ask whether the business is required to file these forms and whether the forms were in fact filed. The presence of these questions will make it difficult for a payer to argue that uncorrected non-filing was unintentional, and likely will cause the highest penalty to apply.
Conclusion
Forms W-2 and 1099-MISC are among those known as “informational forms,” meaning information, rather than taxes, are being remitted with the filings. Late or no filing, though, can be costly due to penalties, and the IRS has indicated repeatedly that they plan to increase scrutiny in this area. We encourage anyone who made payments in the course of a trade or business during 2015 to ensure the appropriate filings are made. This article provides only an overview, and is not intended to provide all the rules and regulations related to filing these forms. Anchor CPA Firm has an experienced team that prepares these forms for you.
IRS CIRCULAR 230 DISCLOSURE:Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachment) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter. Please contact us if you wish to have formal written advice on this matter.
