Employment tax FAQs: W-2 deadline, 1099 forms, and online filing

What you’ll discover:

What exactly is a W-2 form?
What’s the difference between W-2 and W-4?
When is the W-2 due date?
Can I submit my W-2s online?
What is the difference between a W-2 and a 1099 form?
What is the difference between a W-9 and a 1099?
When is the 1099 filing deadline?
Is it possible to submit a 1099 online?
Is there a penalty for failing to file 1099 or W-2 forms or for doing so late?

The deadline for submitting W-2 and 1099-MISC forms is coming quickly. Here are some brief answers to typical inquiries from first-time filers concerning the W-2 deadline, 1099 documents, and online filing.

What exactly is a W-2 form?

W-2 Wage and Tax Statements are used by employers to report their workers’ taxable earnings as well as any taxes withheld from their paychecks. You must preserve a copy of the W-2 in your records for each employee you paid during the tax year, file a copy with the Social Security Administration, and deliver a copy to your employee. There are just a few exceptions where you do not need to submit a W-2 for an employee, but if you are unclear, consult with a tax attorney or accountant.

What’s the difference between W-2 and W-4?

A W-4 Employee’s Withholding Certificate is a document that workers must fill out in order for their employers to withhold the right amount of federal income tax from each paycheck. A W-4 form contains information such as an employee’s name, address, Social Security number, tax filing status, and other details that may be utilized to change the withholding amount. A W-2, on the other hand, is a report of the employee’s taxable income and the amount of taxes withheld based on the information supplied in the W-4.

When is the W-2 due date?

W-2 forms must be delivered to employees and the Social Security Administration by January 31st for any employees who worked through December 31st. Workers who leave their jobs during the tax year have the right to seek their W-2s at any time after they leave. W-2s must be delivered within 30 days after the request or 30 days after the last salary payment, whichever comes first. Other states may have a distinct filing requirement for W-2s, so check your state tax department’s website or speak with a local accountant or tax attorney.

If you submit W-2s as an employer, remember that January 31st is also the deadline for filing your Form 940 Federal Unemployment Tax Act (FUTA) tax return and your Form 941 fourth quarter payroll tax return.

Can I submit my W-2s online?

Yes, you may submit W-2s online with the Social Security Administration. In fact, if you need to submit more than 250 W-2 forms, you must do so electronically. This limit will be reduced to 100 in 2021 and 10 in 2022 during the following several years. If you file by mail this year, please keep in mind that you must also submit a W-3, which is a summary of the information provided in your W-2s.

What is the difference between a W-2 and a 1099 form?

Form 1099-MISC is used to record pay received to an independent contractor throughout the tax year, as opposed to a W-2, which is used to report employee compensation. Whether the contractor is a consultant who performs specialized work for you on a regular basis or a plumber you hired once, if you paid them more than $600, you may be required to submit a 1099-MISC. Payments to companies, payments handled via a payment processor like PayPal, and payments to contractors engaged through a third-party platform are all typical instances. A tax lawyer or accountant may assist you if you are uncertain about submitting a 1099.

What is the difference between a W-9 and a 1099?

Before you can submit a 1099, you must first gather necessary tax information from each contractor. A W-9 Request for Taxpayer Identification Number and Certification completed by the contractor gives the necessary information, including their name, address, and taxpayer information such as Social Security or Employer Identity Number. This form is often completed at the start of an engagement.

When is the 1099 filing deadline?

All 1099s, like W-2s, must be delivered to the contractor and the Social Security Administration by January 31st. Several states have extra filing requirements for 1099s, so check your state tax department’s website or speak with a local tax specialist.

Is it possible to submit a 1099 online?

Yes, you may submit 1099s online; however, you must use IRS-approved software to prepare the file appropriately. If your accounting or payroll software handles 1099s, e-filing is most certainly included. If you want to file by mail, keep in mind that you cannot download and print the form; instead, you must obtain one from the IRS and include a Form 1096 summary. If you are completing more than 250 papers this year, such as W-2s, you must do so online. In 2021, the obligatory e-filing limit will be reduced to 100 forms, followed by 10 forms in 2022.

Is there a penalty for failing to file 1099 or W-2 forms or for doing so late?

Certainly, the IRS may levy fines and other penalties if you fail to follow their rules. Penalties may apply if you file late, file forms with missing or erroneous information, file the inappropriate forms (e.g., W-2s for contractors or 1099s for employees), or file downloaded documents. In general, if you file by mail, you must obtain the actual IRS forms, not those accessible online.

If you want more time to file, you must seek an extension on your 1099 or W-2 due by January 31st. Please keep in mind that extension requests are not automatically granted, thus you may still be charged late fines.

Finally, a good rule of thumb is to prepare your W-2s and 1099s well ahead of the deadline, and to consult with a tax lawyer or accountant if you have any questions.