If you had employees or hired contractors in 2020, hopefully you filed your W-2s and 1099s by February 1.
Did you miss the deadline?
If so, don’t panic—we guarantee you’re not the only one! Yes, it’s frustrating to miss the W-2 and 1099 filing deadline, but there are things you can do to mitigate the damage.
What’s the W-2 and 1099 Deadline?
Since 2015, the IRS has required that employers file copies of their W-2s (Wage and Tax Statements) and W-3s (Transmittal of Wage and Tax Statements) with the Social Security Administration by Jan. 31.
In 2021, January 31 fell on a Sunday, so the deadline was pushed to Monday, February 1.
Do I Need to File W-2s and 1099s as a Business Owner?
That depends. If your business had employees or hired contractors at all in 2020, then yes, this deadline applies to you.
If you have employees, you need Form W-2. It indicates the wages you paid your employee as well as the taxes you withheld for them.
You need Form 1099 if you paid over $600 in 2020 to a contractor, that is, anyone who worked for you as a non-employee. Still not sure if Form 1099 applies to your situation? You can check out the IRS’ full list of payments that should go on a 1099.
There’s one caveat you should know about, though, when it comes to 1099s. If you paid a contractor via PayPal or credit card—even if it was over $600—you don’t need to report it on a 1099. Talk to your accountant to see if this applies to your situation!
What Happens When I Miss the W-2 and 1099 Deadline?
If you missed the filing deadline, you need to pay $50 per W-2 and $30 per 1099 if you file them within 30 days of February 1.
After 30 days, the fee jumps to $110 per W-2 form and $60 per 1099.
If you still haven’t filed your W-2 after that—or if you neglect to file it at all—the IRS charges you a $280 fine per W-2. And if you don’t file your 1099s after August 1—or don’t file them at all—you’ll face a penalty of $100 per form.
As you can see, the fines get increasingly steep the longer you wait! So our advice is that if you already missed the February 1 deadline, don’t wait any longer to file your forms. Get your W-2s and 1099s filed before the 30-day mark so you pay the lowest fee possible.
Tip for Next Year: If you’re approaching January 31 and you know you won’t be able to file the forms in time, apply for an extension. Just note that you need to file for the extension before January 31 for the IRS to consider your appeal.
Get Help From Professional Accountants
The best thing you can do when you miss the W-2 and 1099 deadline is to reach out to a professional accountant. After all, they’re trained to help you in situations just like this!
If you need some expert advice right now, we’d be happy to help. Schedule a free consultation at a time that works best for you!