Form W-2s and most 1099-MISCs are Due Jan. 31
If you own your own business or have a side business in addition to your regular job, you may need to send out several IRS forms by Jan. 31 this year.
The deadline is for forms you issue to employees and others who were paid as part of your business activities throughout the year. Forms W-2s and 1099-MISC forms that contain non-employee compensation in box 7 will have to be postmarked or sent electronically to both the IRS and the person you did business with on or before Jan. 31, otherwise you may face fines for each late form.
Payroll Form Due Dates
– Due date for employers to provide W-2 statements to employees, and also file Forms W-2 with the Social Security Administration.
– Due date for payers to provide most Forms 1099-MISC with non-employee compensation in box 7 to the IRS and to recipients.
– Due date for providers to send Forms 1095 to recipients.
– Employers must file 2019 federal unemployment tax returns and pay any tax due.
– Payers must file most Forms 1099 (except certain Forms 1099-MISC due Jan. 31) and Form 1095 with the IRS (March 31, 2020 if filing electronically).
Most businesses understand that a W-2 is required for each of your employees. But did you know that you also may need to issue a 1099-MISC to each contractor or vendor you’ve done business with during the year?
1099 General Rules
The general rule is to issue a 1099-MISC to each individual contractor or vendor you paid at least $600 over the course of the calendar year. This form requirement doesn’t usually apply to your expenditures on hobbies or personal items, just business activities. In most cases you do not have to issue 1099-MISCs to corporations – just other individuals and partnerships.
Example. Andrea has a side business as a model on nights and weekends in addition to her career as a medical device analyst. Over the course of 2018, she paid $600 to a hair and makeup stylist at Hair Art Inc., $800 to a freelance photographer for headshots and a promotional portfolio, and $2,000 in fees to Viva Talent LLC, a local modeling agency.
Andrea doesn’t need to issue a 1099-MISC to the stylist, because she works for a corporation, but she will have to send one to the photographer, who is an independent contractor. She needs to send one to the modeling agency as well, because it operates as a limited liability company (LLC) and files its taxes as a partnership rather than as a corporation.
Hint: Andrea can make her filing activities easier by issuing Form W-9 to each vendor to get their tax information at the beginning of the year. These forms should be kept on file.
Other examples of business activities that may require you to issue a 1099-MISC include:
- Rents paid to a landlord for office space.
- Expenses paid to a contractor to turn a room in your house into a home office.
- Any payments made to an attorney.
Fraud and Fines
In the past, while most forms were filed by the end of January, you had until as late as March 31 to get the government their copies. The unified Jan. 31 deadline for these forms was changed as part of the IRS’s larger effort to crack down on refund fraud. Fraudsters have been filing bogus returns early in the year in an effort to snag a refund check before W-2s and 1099s arrive that contradict their returns.
Unfortunately, the fines on the self-employed and small business owners for missing the Jan. 31 deadline can be steep. Form W-2s and 1099s filed up to 30 days late are fined $50 each; $100 each for more than 30 days late; and $270 each for those filed after Aug. 1 or not filed at all.
These deadlines are very important as penalties are severe. We’re here to help you stay organized and compliant. Please call 856.667.6225 if you need assistance.