As the deadline for year-end filing creeps closer and closer, the possibility of filing late W-2s may become tempting. However, fight the urge to file after the deadline because there are consequences!
Filing your W-2 late could possibly land you with penalties from the SSA. Keep reading to learn more about these penalties and to motivate yourself to complete your W-2s on time!
What is the Form W-2 and why is it important?
The W-2 reports wages paid to employees throughout the tax year as well as the income tax, Medicare, and Social Security taxes withheld from the payment. This information should be submitted to the Social Security Administration (SSA) and a copy must be furnished to the employee.
This is what makes the W-2 crucially important, your employees need a copy of this form to complete their own federal income tax returns. Failing to furnish your employees with a copy or even sending them a copy late will delay them filing their taxes.
What is the deadline for filing Forms W-2?
You must file all of your employee’s W-2s with the SSA and mail out your recipient copies on or before January 31. Since this date falls over the weekend this year, you must submit and mail your W-2s on or before February 1, 2021.
What are the penalties for the late filing of W-2s?
According to the IRS, if you fail to file W-2s with correct information by the deadline, you could be penalized under section 6721. The following errors on W-2 must be corrected to avoid W-2 penalties:
Paper filing when you were required to e-file
Reporting an incorrect TIN
Filing paper W-2s that are not machine-readable
When it comes to filing your forms late, the penalty will be determined by the amount of time that has passed since the deadline.
For example, if you file your forms late, but within 30 days of the original deadline (February 1, 2021), you could be charged up to $50 per form.
If you file W-2s anytime past 30 days late and August 1, 2021, the penalty could be as high as $110 per form.
If you file the W-2s after August 1, 2021, you could be penalized up to $270 per form.
After this point the IRS may conclude that you are intentionally disregarding your filing requirements, therefore they can penalize you up to $550 per form.
The TaxBandits application is designed for fast and efficient e-filing, we’ve spent a decade building the features that business owners and tax professionals need!
E-filing your W-2s doesn’t have to be daunting, even though the clock is ticking. With TaxBandits you can use our bulk upload template to upload all your employee data into your TaxBandits account.
When it comes to recipient copies, you can opt-in to postal mailing. Our USPS validation process ensures that your employees’ copies are sent to the correct addresses. Looking to go paperless this year? Employers can give their employees access to print and download their forms using our secure Online Access Portal.