As we approach year-end for 2016, we want you to be prepared for the IRS tax filing changes that have taken place.
W-2 & 1099-MISC filings
Earlier this year, Congress passed legislation that aligns the deadlines of filing annual wage reports to recipients and to the Social Security Administration (SSA). If you distribute W-2s to employees or 1099-MISC forms to independent contractors, you must send them out by January 31st and file them with the SSA by the same date.
The former SSA deadlines were February 28th for paper and March 31st for e-file. With the deadlines now on the same January 31st date, the IRS will be able to match individuals’ W-2s or 1099-MISC forms with their tax returns as they are filed. This should make the process more efficient as well as reduce tax fraud and identity theft – which is the main objective for changing the deadlines.
- If any changes must be made to a W-2, employees will have to make corrections using the W-2C form online.
Steep penalties for missing deadlines
The U.S. government means serious business when they give you a deadline, and they want it done correctly.
- All W-2s must either be postmarked or sent electronically by January 31st.
- Also, all 1099-MISC forms must still be sent to all independent contractors by January 31st.
- If there is an amount in Box 7, the IRS filing must now also be completed and submitted.
- If there is no amount in Box 7, the 1099-MISC forms remain unchanged.
- For the most current information regarding related penalties, please visit irs.gov directly.
Other forms & filing changes
The 1095-C and 1095-B forms were granted extensions again for 2016. The January 31st due date is pushed to March 2, 2017 for insurers and certain other providers. For details about this extension, visit the IRS online here.
If you live in the state of California, the IRS has mandated new minimum thresholds for e-filing the quarterly DE-9 and DE-9C forms; which takes effect January 1st 2017. The fourth quarter 2016 filings fall under the new threshold mandate and are due to the Employment Development Department (EDD) by January 31, 2017.
You must file and pay electronically if you have 10 or more employees in 2017. All employers will be required to file and pay electronically in 2018. For complete information about these filings, please refer to the State of California’s EDD website.
Seek good counsel
While writing this article, the IRS continued to make changes and may continue to make changes after this article is published. Please consult a qualified tax accountant to get informed, professional advice for your specific tax situation.