GRAND RAPIDS, Mich., Jan. 11 /PRNewswire/ -- Greatland, one of the country's leading providers of W-2 and 1099 products for business, released its top W-2 and 1099 filing "pitfalls" to watch out for this tax season. Greatland compiled this list based on its top customer inquiries.
While many businesses are electing to e-file their W-2 and 1099 forms with the Social Security Administration (SSA) and / or the Internal Revenue Service (IRS), the majority of businesses still rely on filing paper forms via mail. There are two common missteps businesses or tax preparers make when filing paper W-2 or 1099 forms:
"Seeing red" - the 1099 red ink form requirement: businesses must file Copy A of form 1099 (the file that is sent to the IRS) on a pre-printed red ink form(1). Only Copy A must comply with this requirement. All other copies of the forms can be printed with black ink.
Perfecting perforation on W-2s and 1099s: similar to the red ink form requirement, the IRS and SSA have a perforation requirement that specifies all paper forms contain no horizontal perforations separating forms on Copy A. However, all other copies must be perforated between the individual forms, and according to the IRS, the use of scissors to separate copies is not an acceptable method(2).
It is important to verify with your tax form provider that all pre-printed paper forms comply with IRS and SSA requirements. Failure to comply with these requirements can result in substantial penalties.
Electronic filing or "e-filing"
The e-filing requirement: both the SSA and the IRS encourage e-filing of W-2 and 1099 forms, no matter how few forms need to be filed. However, if the number of forms of each type totals more than 250 (e.g. 250 1099-DIV 300 1099-INT, 250 W-2), the IRS and SSA require the forms to be filed electronically.
The benefits of filing electronically are:
- The deadline for filing forms with the IRS and SSA is extended by one month, compared to paper filing
- Paper handling and mailing is reduced, resulting in possible cost savings
- Reduced environmental impact
- None of the federal copy paper form requirements (red ink, perforation, etc.)
- The submission status of your filing is provided (e.g. "Received", "Not Yet Processed", "Complete", etc.)
The deadline for W-2 and 1099 forms to be provided to recipients is Feb. 1, 2010. This year's deadline for W-2 and 1099 federal filing is March 1, 2010 (paper) or March 31, 2010 (electronic). You may request an automatic 30-day filing extension by completing form 8809. New for 2009: the due date for furnishing statements to recipients for forms 1099-B, 1099-S, and 1099-MISC (if amounts are reported in boxes 8 or 14) has been extended to February 16, 2010.
Greatland has an extensive 1099 and W-2 fact center located on its website with answers to many other filing questions. The company recently launched speedEfiler.com, a new web-based wage-reporting tool that enables small and mid-size businesses to file their W-2 and 1099 forms online, and have copies printed and mailed directly to employees or recipients.
Greatland (www.greatland.com) is one of the country's leading providers of W-2 and 1099 products for business. Specialized product lines include: W-2 and 1099 forms and software, business checks and software, income tax preparation supplies and software, and mortgage forms. Greatland is an employee-owned company with locations in Grand Rapids, Mich. and Green Bay, Wis.
(1) IRS Publication 1179, Section 2.1.4
(2) 1099 - IRS Publication 1179, Section 4.4.3; W-2 - IRS publication 1141 Part B Section 2 Paragraph .05