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Tax News

IRS Changes Deadlines & Penalties for 1099 & W2

If in the past you haven't always been timely in filing your employees 1099's or W2's with the IRS next year you're going to want to make sure you get them done.  ASAP!

The Trade Preferences Extension Act of 2015 included a large increase in the failure-to-file and filing late penalties for information returns such as Form 1099 and W2 filed after December 31, 2015.  The penalties were effectively doubled.

What does this mean for you as an employer?  It means that not sending in these forms by JANUARY 31, 2017 you could see penalties from $100-$250 per form you file late.  The cap on the penalty has also been raised from $1.5M to $3M.  The previous dates to file with the Social Security Administration and the IRS were Feb 28 for paper filers and March 31 for electronic filers.

If you intentionally fail to file as an entity, you will see your penalties increase to $250 to $500 per return with no annual cap.

"The increased penalties apply to both the copy filed with the IRS and the copy filed with the payee.  As a result, penalties essentially total $500 per form with an annual cap of $6M for general failures.  For intentional failures, combined penalties are $1,000 per form with no cap."