(BPT) - The adage that an ounce of prevention is worth a pound of cure still rings true - especially for businesses preparing for tax season. If you oversee your company's filing requirements, knowing what is due and when can save you and your employee's penalties, time and stress.
Every year, January's arrival means two important tasks if you are in charge of filing and reporting for your company or employer: issuing W-2s and 1099 forms to employees. Small-to-medium-sized businesses should plan accordingly to stay ahead of key dates crucial to making the 2013 filing season your "gold-star" year.
According to the Internal Revenue Service (IRS), businesses must send their employees W-2s by Jan. 31 and provide all W-2s and the transmittal form W-3 to the IRS by the last day of February.
If an employee does not receive a W-2 from their employer, they can contact the IRS for assistance. The IRS requests employees to wait until at least Feb. 14, allowing for slow mail delivery. After Feb. 14, the IRS will contact the employer and request the employee receive a duplicate W-2. The employer will be notified of the penalties if it fails to comply with government regulations, which can include fines, penalties and even imprisonment.
The same applies to issuing 1099s, used primarily for reporting company payments to freelance and contract workers, or other non-employees. In general, businesses need to furnish employees with a copy of their 1099 form by Jan. 31, 2014.
According to the experts at Greatland Corporation, a company that provides W-2 and 1099 forms and e-filing services to small businesses, for the past three years, the IRS has been cracking down on contractors who aren't always attentive when it comes to paying taxes. In fact, the government has collected $9.5 million in back wages from employers who misclassified workers as independent contractors since 2011.
"We have many customers that used to feel overwhelmed by adopting a clear process for managing the timeline for ordering and submitting their forms," says Janice Krueger, a spokesperson for Greatland, one of the country's leading providers of W-2 and 1099 products for business. "Feedback from a recent survey we conducted showed that 43 percent of small business filers are terrified of being fined by the IRS for not complying with a new rule or regulation for W-2 and 1099 reporting. Adopting an early game-plan is always recommended to allow enough time for the complicated filings."
Estimates are that 20 percent of businesses misclassify workers; so make sure your business knows how to correctly report your contractors when issuing a W-2 and 1099 forms.
According to Greatland, these key dates will allow company W-2 and 1099 filers to stay on track this filing season:
* Jan. 31, 2014 - Due date to mail employee copies for W-2
* Jan. 31, 2014 - Due date to mail recipient copies for 1099
* Feb. 18, 2014 - Due date for 1099-MISC if reporting payments in boxes 8 or 14
* Feb. 28, 2014 - Due date to send Copy A to federal agency on paper (W-2 to SSA, 1099 to IRS)
* March 31, 2014 - 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 state and filing dates to remember on Greatland's W-2 and 1099 fact center website.