Business Owners: Less than One Week to File W-2 and 1099s

GRAND RAPIDS, Mich., Jan. 26, 2011 /PRNewswire/ -- Memo to business owners with employees or anyone who has contracted out more than $600 in work to a freelancer or subcontractor:  you have until Jan. 31, 2011 left to provide the appropriate wage and income reporting form – a W-2 or 1099-MISC – to all recipients.  

And if you are a procrastinator like millions of other business owners, sorting through the maze of IRS reporting requirements at the last minute can make a tight deadline even more stressful.  FileTaxes.com, a site that files, prints and mails 1099 and W-2 forms for small businesses (even at the last minute), offers the following tips and answers to the most frequently asked filing questions:

Filing tips

• Always use official forms from the current year, not last year's leftovers
• Recipients (the employee or contractor) must have their CORRECT W-2 or 1099 form by Jan. 31, 2011.  The IRS also requires these forms are sealed in an envelope that is marked "Important Tax Information" – which can be in a pre-printed envelope or written by hand
• You must provide any contractor you have paid more than $600 in wages to in 2010 a 1099-MISC form reporting the total income paid
• If you intend to print and mail the IRS its 1099-MISC copies, they must be the RED Copy A and must be postmarked by Mar. 1, 2011 with a 1096 transmittal form to summarize the entire batch you are filing
• If you intend to e-file the IRS its copies, the deadline for doing so is Mar. 31, 2011
• Not every state requires you to file 1099 or W-2 forms. File only with the states that require it.  More information can be found here and here.
• If you don't have a dollar amount or information to put in a box, leave it blank
• Get it right this year because penalties for incorrectly filed forms double in tax year 2011

The company's call center is lighting up this time of year.  Below are the most common reporting questions FileTaxes.com gets from businesses at year-end:

Answers to Five Common Reporting Questions

1] How do I know if a worker is a 1099 contractor or a W-2 employee?

The general rule from the IRS is that it depends on how much control the worker has over the work.  If the worker uses his or her own tools or equipment, and carries his or her own insurance, the person is likely considered a contractor. The business should issue that person a 1099-MISC reporting the income paid, and the contractor is then responsible for paying all taxes related to that income (self-employment taxes).  If the worker can be considered an employee, the business is responsible for withholding income tax and paying payroll taxes on behalf of the employee, and must issue a W-2 to report this. For detailed information, visit:  http://www.filetaxes.com/Content/1099MISC_Microsite_Compliance

2] Do I need a 1096 transmittal (summary) form if I e-file?

No, if you e-file with the IRS you do not need to file a 1096 Summary Form. A summary is not required for e-filing.

3] Can I e-file low quantities of forms?

Yes! You don't need to have multiple forms to be able to e-file. You can use a site like FileTaxes.com to e-file as one or 1,000 forms.

4] Do I need to do a state copy?

If the state requires workers to file an income tax form, you likely need to file a 1099-MISC or W-2 with the state the worker resides in, and provide an extra copy to the recipient to file with his or her tax returns. A list of state requirements can be found here and here.

5] How do I correct a 1099-MISC or W-2?

If you have already filed a 1099-MISC with the IRS, and need to correct anything but the address, you need to file a correction with the IRS and with the recipient. Simply print another form and check the 'correction' box at the top. If you filed the forms on FileTaxes.com originally, you can file a correction there as well.

Anyone can file a W-2c (correction) on FileTaxes.com. This form should be used to correct any data on a W-2, except an employee address. You don't need to file a W-2c to correct only an address.

Additional helpful information regarding 1099 and W-2 reporting requirements can be found at FileTaxes.com, the IRS Employment Tax Center, or the Small Business Association 1099-MISC area.  

About FileTaxes.com and Greatland

FileTaxes.com is a subsidiary of Greatland Corporation (www.greatland.com). Greatland 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.  Follow us on Twitter: @GreatlandCorp

SOURCE Greatland Corporation