In order to fight fraud, The Protecting Americans from Tax Hikes (PATH) Act of 2015 was signed by President Obama in December. The act changes the filing deadline for W2s and most 1099s. The biggest change for most people is when they have to remit the 1099-M forms. In the past these had to be mailed out by March 31st – now they are due January 31st – the same as employee W2s! If you haven’t already updated your records in QuickBooks with the needed information to complete the forms you should start now.
Previously employers had two dates to remember when remitting W-2s: January 31st, to provide employee copies, and February 28th, for paper filings submitted to the Social Security Administration (March 31st for electronic filings). This has also changed.
Beginning with forms from 2016, employers have one filing deadline for all Federal W-2s, January 31st. This is the new date for both employee and agency copies; and it’s the same whether you are filing paper or electronic returns.
The new January 31st deadline applies to certain types of 1099s. If you’re filing Form 1099-Misc and reporting amounts in Box 7: Nonemployee Compensation, then you need to meet the new deadline of January 31st. This pretty much covers the majority of business owners; since this is what you file for your subcontractors.
If you don’t have amounts in Box 7, then the deadline will still be February 28th for paper filings or March 31st for electronic filings.
Employers need to be ready to complete year-end tasks:
• Confirm the accuracy of employee information
• Make sure all payrolls and subcontractor payments are recorded in QuickBooks before you generate the forms
• Confirm you have all needed information for your subcontractors; if you don’t have a W-9 form on file for your subcontractors you can download a fillable form from: https://www.irs.gov/pub/irs-pdf/fw9.pdf
• Report/submit any year-end adjustments as soon as possible
• Checking year-end totals for any inconsistencies
If you need to make corrections after you’ve already sent your file to the Social Security Administration, you can do so by filing Form W-2c, Corrected Wage and Tax Statement. You can read more about this at: https://payroll.intuit.com/support/kb/2001909.html
This is going to be a burden on most small businesses; no doubt about it. The more you can do now to alleviate the extra stress of the new deadline the better.
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