The new year is on it’s way and, bringing with it many upcoming deadlines for your year-end filing. Whether you are a small business owner or a tax professional filing on behalf of many clients, you know that the time has come to begin filing W-2s and 1099s.
This year has been different for so many reasons, one of these being the revival of the Form 1099-NEC. This form will be used to report all non employee compensation paid to independent contractors during the 2020 tax year.
Without further ado, let’s talk about your year-end filing obligations with the IRS and SSA.
Form W-2 for Tax Year 2020
The Form W-2 is a wage tax form that reports the wages you paid to your employees and the taxes that you withheld from their pay. This includes social security, Medicare, and income taxes. This form must be completed and submitted to the SSA on or before January 31. Employers also have the responsibility to furnish their employees with a copy of their Form W2.
Since the deadline falls on a weekend this year, the deadline to file is February 1, 2021.
For more information on the Form W-2, check out our complete guide below!
Form 1099-NEC for Tax Year 2020
As we mentioned earlier, the Form 1099-NEC is being reintroduced for tax year 2020. This is a form that hasn’t been active since the 1980’s, but it’s dusting off it’s shoulder pads and re-joining the IRS line up just in time for your year-end filing.
The Form 1099-NEC should be used anytime that you are reporting nonemployee compensation to the IRS, as you usually would using Box 7 of Form 1099-MISC.
Please note that if you need to issue a form to report prior-year nonemployee compensation you’ll need to use a prior-year Form 1099-MISC.
What’s with the change? Well, the IRS is trying to simplify your year-end reporting. For many years the Form 1099-MISC with nonemployee compensation has been due to the IRS by January 31, however, other types of payments weren’t due until March. The purpose of Form 1099-NEC is to eliminate the confusion of one form having two different deadlines.
Just to be crystal clear, the deadline for filing Form 1099-NEC with the IRS is February 1, 2021. This is also the deadline for distributing recipient copies to your independent contractors. Remember, TaxBandits is here to take the stress out of your tax season.
Form 1099-MISC for Tax Year 2020
While you won’t be reporting your nonemployee compensation on Form 1099-MISC, it will still be used to report many different types of payments. Some of the most common include:
Royalties or broker payments in lieu of dividends exceeding $10.
Awards or prizes
Medical and healthcare payments
Fishing boat proceeds
Payments made to attorneys
Crop insurance proceeds
The Form 1099-MISC is now due to the IRS by March 1, 2021 if you are paper filing or March 31, 2021 if you are e-filing. The deadline to furnish copies to your recipients is February 1, 2021.
For a complete guide to the 1099 Series, we have a complete guide for this too!
TaxBandits is here to simplify your W-2 and 1099 filing!
With our bulk upload feature, you can easily upload all your employee details for faster filing. TaxBandits can also help you fulfill your state filing requirements as well.
We eliminate your chances of filing an incorrect TIN for your employees and recipients by running TIN Matching on your forms.
We also offer options for handling your recipients copies. When you select our postal mailing services, we ensure that all of your forms are printed and mailed to USPS Validated addresses within 24 hours of transmittal.
You can also choose our Online Access. This allows your employees to view and download their forms at any time through a secure portal.