(BPT) - For small businesses, January's arrival usually brings one very important task: issuing W-2s and 1099 forms to employees and independent contractors. The good news is this year, due to the typical filing date of Jan. 31 falling on a weekend, businesses have a built-in buffer and a couple extra days to complete these tax reporting documents.
February 2, 2015, is the date to remember when preparing your business' tax reporting forms this season. But don't forget, even with the additional days, getting a head start on cutoff dates can protect you and your company harsh consequences, wasted time and unneeded hassle.
According to the Internal Revenue Service (IRS), businesses must send their employees' W-2s by Feb. 2 and provide all W-2s and the transmittal Form W-3 to the Social Security Administration (SSA) by March 2, 2015. This has also been extended because the normal due date falls on a weekend.
In the event that an employee does not receive a W-2 from their employer on time or at all, they can contact the IRS for assistance. Even with the extended reporting date for businesses, the IRS requests that employees wait until at least Feb. 14, allowing for slow mail delivery and other varying factors. After Feb. 14, the IRS will contact the employer for the employee, request the missing form, and send the employee Form 4852 to complete, which is a substitute for the original W-2. The payer will be notified of the penalties if it fails to comply with government regulations, which can include significant fines.
The same applies to issuing 1099s, used for reporting company payments to freelance and contract workers or other non-employees. In general, businesses need to supply workers with a copy of their 1099 form by Feb. 2.
Employers who unintentionally misclassify workers also run the risk of significant penalties and interest, so being overly cautious never hurts, according to the experts at Greatland Corporation, a company that provides W-2 and 1099 forms and e-filing services to small businesses. What's more, if a small business fails to file a W-2 or 1099, it can be fined up to $500,000, which can accrue interest if it remains unpaid.
'We have many customers who become overwhelmed when submitting their forms and managing the deadlines over the next few months,' says Janice Krueger, a spokesperson for Greatland, one of the country's leading providers of W-2 and 1099 products for business. 'Thirty-nine percent of small business filers are never certain if they are meeting all rules and requirements when reporting each year. Knowing what obstacles and deadlines lie in the months ahead allows enough time for tackling even the most complicated filings.'
Estimates are that 30 percent of businesses misclassify workers; so make sure your business knows how to correctly report your workers when issuing W-2 and 1099 forms.
Remembering these key dates will allow W-2 & 1099 filers to stay on track this filing season:
* Feb. 2, 2015 - Due date to mail employee copies for W-2
* Feb. 2, 2015 - Due date to mail recipient copies for 1099
* Feb. 17, 2015 - Due date for 1099-MISC if reporting payments in boxes 8 or 14
* Mar. 2, 2015 - Due date to send Copy A to federal agency on paper (W-2 to SSA, 1099 to IRS)
* March 31, 2015 - Due date to send Copy A to Federal agency electronically (W-2 to SSA, 1099 to IRS)
To make sure your business doesn't miss a deadline, you can find a full list of federal and state filing dates to remember, along with even more reporting tips on Greatland's W-2 and 1099 fact center website.