Get ready for your W2 & 1099 forms reporting requirement
Businesses must prepare tax reporting forms as part of their tax filing obligations.
Generally, W-2 forms are used for part-time or full-time workers, Form 1099-NEC is used for contractors and other non-employees. W-2 and 1099-NEC forms must be filed by January 31, 2023. The same deadline applies for completing both W-3 and 1096 forms to the appropriate government agency.
There are penalties on companies that issue W2 and 1099s forms late.
Must taxpayers do not like receiving IRS forms 1099. Businesses may not like sending them out. Generally, business must issue the forms to any payee (other than a corporation) who receives $600 or more during the year. As the Year-End approaches, good preparation now can help business avoid problems later.
Review payments you have made during the year and verify you have completed information for all payees for whom you will be required to file a 1099. Information that should be gather are as follows:
- Social Security
- Individual Taxpayer Identification Numbers
If you have incomplete information for some payees, request they complete a W-9 form so that you may update your records. Penalties for late filing or delinquent annual income statements of W2 and 1099s forms are as follows:
The penalty is:
- $50 per Form W-2 or per Form 1099 if you correctly file within 30 days of the due date
- $110 per Form W-2 or per Form 1099 if you correctly file more than 30 days after the due date but by August 1
- $270 per Form W-2 or per Form 1099 if you file after August 1, don’t file corrections, or don’t file required Forms W-2 or Forms 1099