Business owners beware - several filing deadlines have changed beginning this month. Forms W-2, 1099, 1065 (Return of Partnership Income) and 1120 (Corporate Tax Return) all have new due dates. These changes are accompanied by higher penalties for late filing or non-filing.
The logic behind these changes is to provide the IRS with more timely information for data matching in its campaign to combat fraudulent refunds. Under the previous rules, some taxpayers were receiving refunds before their W-2s had reached the IRS. If there was a mismatch of data or a completely fabricated return, the information was coming too late to prevent fraud.
Form W-2 has always been due to employees by Jan. 31, but employers previously had an additional 30 to 60 days to file them. That deadline has just moved and now coincides with the date the form is provided to the employee, Jan. 31. Extensions will now be granted only in extraordinary circumstances or catastrophe and in IRS-speak that mean almost never.
Form 1099-MISC is also now due to the IRS by Jan. 31 when reporting nonemployee compensation payments in box 7. This change would primarily include payments to self-employed persons. When reporting rents or other payments not in box 7, the deadline is still March 31 to file electronically.
Additionally, penalties for late filing of form 1099 will double from their previous level. The penalty for non-filing of 1099s will increase from $100 to $250 per form. If the non-filing is considered intentional, the penalty jumps to $500 per form. This penalty can add up very quickly, so please observe the obligation to file 1099s and be sure to do it on time.
The Return of Partnership Income was due April 15 in the past; it is now due March 15. This change is helpful to partners who wish to file their personal returns without an extension. Often the Form K-1 from the partnership caused a delay for the individual return, but the 30-day leeway will now help with this problem.
The previous due date for corporate tax returns was March 15; it has now been moved to April 15 for C-Corporations, but remains March 15 for S-Corporations. In the case of an S-Corporation, the individual taxpayer needs the Form K-1 from the corporation to file the personal tax return, thus the earlier due date.
Be sure to contact the payroll service or professional adviser early this year to get these forms filed timely. Many businesses will be unaware of the changes until the deadline is very close, and there could be a backlog to get the assistance needed. For a do-it-yourself paper filer, buy those red 1099 and W-2 forms soon.
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