The 3rd quarter just closed, and we’re looking ahead to the annual filing of W-2s and 1099s. There are some changes in the filing deadline that take effect this year.
Previously, W-2s and 1099s were due to employees and contract laborers by January 31st following the end of the year. They were due to the IRS and the Social Security Administration by February 28th, one month later. Why the difference, who knows, but most likely you or your preparer simultaneously sent the W2s to the employee and to the IRS.
(We do know why the date difference: it provided an opportunity to find and correct errors before submitting final statements to the IRS and to prevent the headache of amending returns).
Now, with to the PATH Act of 2015 (Protecting Americans from Tax Hikes), those same returns are due to the individual and to the IRS by January 31st.
The good news is that the IRS and the SSA are sharing all of this wage data. Returns submitted electronically to the SSA will then be forwarded to the IRS.
Returns can be assessed an accuracy related penalty and a late filing penalty, but a safe-harbor is available for certain minor errors. The accelerated deadline is an effort to provide the IRS with additional time and information when determining refunds based on the earned income credit and refundable child tax credits. Previously, a taxpayer could have filed their return on February 1st, just after receiving their W2, and the IRS would process it and issue any refunds, before being able to cross-check the information on the return.
If you have any questions about this new filing deadline and how it affects you, please give us a call.