Traditionally speaking, January 31st has been the date by which employers must provide their employees with tax forms. However, 2017 brings about a drastic change to this system: January 31st is now also your IRS/SSA filing deadline. As such, your distribution and filing processes will be far more compressed this year than they have been in the past.
New Deadline: Complications
The obvious complication with a moved-up deadline lies in the condensed filing period. Instead of having several months to distribute your forms, review the information, and correct any errors before sending them off to their respective agencies in March, you’ll need to do all of that between early January and the 31st. Naturally, this will increase the pressure on both your employees and your payroll staff.
You don’t get a grace period for electronically filed forms this year either, since this deadline now applies to both paper and electronic submissions alike. This will be a hard pill to swallow for larger employers who relied on the later e-file date.
In addition to this influx of good news, recipient filing verification is out, too—unless you have an impossibly small workforce with impeccable work ethic, you won’t be able to get your forms in for review and then get them back in time to meet the January 31st deadline.
There’s also a weirdly specific complication for the form 1099-MISC filing date: it only pertains to employers filling out the box 7 field (“nonemployee compensation”). Nearly all employers distributing 1099-MISC forms will need to file for nonemployee compensation, but be aware of this caveat in the off chance that it applies to you.
How Your Filing Process Should Change
Your first order of business should be to inform your employees and your fellow staff of this change, be it in person or via email (seriously, tell them right now) so everyone is on the same page. Working as a team with the same common goal is going to be the best way to make this transition a relatively painless one.
If your company has traditionally relied on either recipient filing to point out errors in your forms before sending them off to the IRS or the electronic form grace period—or both, as the case may be—this will be a particularly harsh transition. Doing the following may help speed up the filing process:
- Order your forms well in advance. You’ll want to give yourself plenty of margin for error early on rather than waiting until late in December to find out that your go-to form provider is behind on shipments.
- Set some time aside during a work day for employees to fill out their respective forms while on-site. You’ll want to do this immediately after employees return from vacation (sometime during the first week of January).
- Send electronic forms out to remote employees on January first. They should be aware of the changes to this year’s filing deadline, but be sure to remind them of the urgency entailed here.
- Set a strict review deadline for your company. This will vary depending on your company’s size.
- Contact the IRS or the SSA well ahead of time if you anticipate delays. While this shouldn’t be your first option, don’t make it your last one either.
- Hire a payroll consultant. Adding another 1099-MISC or two to your existing heap will be worth it in the long run if it means you get your forms in on time.
The above criteria may not all apply to your business, so cherry-pick as much as you like. The basic theme here is to expedite the process through cooperation and enhanced team focus from the beginning of January through the 31st.
Every year presents a new set of challenges, and this one is no different. To make 2017’s contentious filing period a successful one, call Abacus Payroll today at (856) 667-6225 for a no-obligation quote.