Important Updates for the Upcoming Tax Season
As the tax season approaches, it’s crucial for employers to be aware of the important deadlines and changes in filing requirements. The IRS has set January 31 as the deadline for submitting various wage statements and forms related to independent contractors.
Key Deadlines for Employers
- Employers must file Form W-2, which details wage and tax statements, and Form W-3, the transmittal of these wage and tax statements, with the Social Security Administration by January 31.
- The same deadline applies for Forms 1099-MISC, for miscellaneous income, and 1099-NEC, for nonemployee compensation, which are to be filed with the IRS. These forms are essential for reporting payments made to independent contractors.
- Extensions for filing are not automatic. Employers must request a 30-day extension by January 31 using Form 8809. However, this does not extend the deadline for furnishing wage statements to employees; a separate extension for this purpose is needed.
- Timely and accurate filing is essential for aiding the IRS in combating fraud and avoiding penalties. For more information on the penalties for late or incorrect filings, employers can visit the IRS’ Information Return Penalties page.
- Note that the new $600 reporting threshold for Form 1099-K has been delayed. Until the tax year 2023, only transactions over $20,000 and more than 200 transactions need to be reported. The threshold is planned to be reduced to $5,000 for the tax year 2024, gradually introducing new reporting requirements.
Remember, staying informed and proactive about these changes and deadlines can make the tax filing process smoother and help avoid potential complications. For more detailed information, please refer to the original IRS article linked at the end of this newsletter.