A Last-Minute Filing Checklist for your 2020 Tax Forms

The deadline is finally here! Today employers, business owners, and individuals around the nation must complete their year-end filing of Forms 1099-NEC, W-2, 940, 941, 944, and 945. 

Here is the checklist you need to make sure that you are ready for the deadline and that you’ve checked all the boxes of your year-end filing for the tax year 2020. 

Form 1099-NEC

This information has been reported on box 7 of Form 1099-MISC in previous tax years. The Form 1099-NEC was created to specifically address reporting non-employee compensation.

If you are a business owner that has benefited from the work of independent contractors during the year, and you made payments to them of $600 or more, it is very important that you file a Form 1099-NEC. You are also required to furnish your independent contractors with a copy of Form 1099-NEC for their personal records. When it comes time for these individuals to complete their personal income tax returns, they will need this information. 

Form W-2

Form W-2 must be filed by all employers who hired workers during the 2020 tax year. The W-2 is not only used to report your employees’ wages to the SSA, but this reports the income taxes, social security taxes, and Medicare taxes withheld from their pay. 

Much like the 1099-NEC, employers must distribute copies to their employees. Having the information from their W-2 copies will be crucial for your employees when they file their personal income tax returns.

Form 940

Form 940 is used by employers to report the Federal Unemployment Tax Act (FUTA) taxes. If you paid $1,500 or more to an employee during any quarter during the current or previous tax year, you are required to file Form 940 and pay FUTA taxes. 

Agricultural employers must file Form 940 if they have employed 10 or more farmworkers and paid $20,000 in wages during any quarter of the current or previous tax year. Please note that Indian Tribal Governments, Tax-Exempt Organizations, and state and local government employers are exempt from this tax, and therefore don’t need to file Form 940. 

For more information, check out the complete IRS instructions.

Form 941

Employers who pay wages that are subject to income tax, social security, or Medicare tax withholding, must file Form 941, the Employer’s Quarterly Federal Tax Return. This form has gone through some pretty radical changes during the 2020 tax year, however, there are no new changes between the third quarter version, and the fourth quarter version which is due on February 1, 2021. 

On Form 941 employers can report the following quarterly information:

• Employees’ wages
• Employees’ tips
• Medicare taxes withheld
• Federal income taxes withheld 
• Both the employer’s and employees’ share of social security tax and any amount of social security taxes that were deferred. 
• Any qualified refundable or non-refundable tax credits for paid sick or family leave due to COVID-19.
• Employee Retention Credits due to COVID-19. 

Form 941 must be filed with the IRS even if your business has paid no income or has closed during the previous quarter. Employers can indicate on the form that they paid no wages. If the business has closed, the employer can indicate that this is the final 941. 

Form 944

This form is filed by the smallest employers. Those who have withheld $1,000 or less in income taxes, social security taxes, or Medicare taxes are eligible to file Form 944. This is an annual form as opposed to the quarterly 941, however, it reports similar information.

It is important to note that small employers can not choose to file Form 944, they will need official permission to file Form 944 instead of Form 941. The advantage of Form 944 for small employers is that they only have to report their employment taxes and make payments annually as opposed to quarterly. 

Form 945

Form 945 is used to report federal income taxes withheld from non-payroll payments. According to the IRS, some of these payments include:

• Pensions 
• Military Retirement
• Gambling winnings
• Indian gaming profits
• Government payments where the recipient elected to withhold the federal income taxes.
• Dividends distributed by an Alaska Native Corporation 
• Payments that are subject to backup withholding

For more information on Form 945, check out the IRS instructions. 

Did you forget to file any of these forms? Don’t panic, TaxBandits is here to help! We support all of these forms for the 2020 tax year, and it’s not too late to complete them, you have until midnight!

Get started with TaxBandits today!