What's New for W-2 and 1099 Reporting
In January, it's customary to begin thinking about the year’s regulatory changes and to figure out what's new for W-2 & 1099 reporting. The year-end can be intimidating for anyone, and even when only a handful of employees or contractors must be issued W-2 and 1099 forms, there’s still a lot to know to ensure possible fines or penalties are avoided. According to the experts at Greatland, there are more than 25 state and federal year-end reporting forms that may need to be sent.
Greatland is the country’s leading provider of W-2 and 1099 products and resources for business. The company’s speedEfiler.com service is a web-based wage-reporting tool that lets small and mid-size businesses and professional accountants to file their W-2 and 1099 forms online, and have copies printed and mailed directly to employees or contractors.
Business owners can take some of the stress out of year-end W-2 and 1099 reporting by following some useful Greatland tips, such as looking for ways to outsource W-2 and 1099 reporting or for resources that will guide you through the process of doing it yourself.
If you haven’t already gone through your accounting and payroll records to determine who’s due to receive a 1099 form, start now. That can reduce the stress of trying to figure it out right before the Jan. 31 deadline to have 1099 forms and W-2s sent to contractors and employees, since the forms must be mailed and postmarked on or before that date. If you think bad weather could keep you away from work and prevent you from filing, plan to submit the forms a few days early.
It’s important to verify that your personnel records are correct and contain correct mailing addresses and Social Security numbers. It’s best to give employees and contractors an opportunity to update their mailing addresses. A handy way to do that is to remind them through emails or by printing a message on their check stubs. If you’re still missing information from contractors, use Form W-9 to collect the data.
All general ledger accounts postings must be brought up-to-date, and you must reconcile those that impact wages, taxes and business expenses.
Before completing Forms W-2 and 1099, be sure to read the first page of the instructions where the Internal Revenue Service provides information on new or changed reporting requirements. Make sure you take the time up front to do a thorough data review and save yourself time and potential fines.
Other important dates to remember are Feb. 28, when Copy A of W-2s must be sent to the Social Security Administration (SSA) and 1099 forms must be sent to the IRS on paper; and April 1, the due date to electronically file copy A of W-2s with the SSA and 1099 forms with the IRS.
Several changes will affect W-2s, Greatland experts say. The reduced rate of 4.2% for social security tax withholding (for employees only) is extended for wage payments made in 2012. Also new in tax year 2012, compensation of $600 or more that is paid to H-2A visa agricultural workers must be reported on Form W-2 if the worker furnishes a valid taxpayer identification number. If the worker does not furnish a valid taxpayer identification number, the payments should be reported on Form 1099-MISC.