Missed The 1099 & W2 Deadline? Here's What You Should Know

Octavia Conner

By Octavia Conner

Tags: All, Taxes, Accounting, Strategy

Businesses that hire contractors and employees must provide them and the IRS with W-2 and 1099 forms by January 31.

But what if you missed the deadline. Are there penalties, and what should you do next?

In this episode, I will provide you with insight on what to do if you missed the deadline, if you need to file an extension and how and the penalties for not filing the forms by the deadline.

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Business owners use 1099-NEC and W-2s to report taxable income to the IRS. 

 

The W-2 form reports income, withholding, state taxable income, and other information to the Social Security Administration. The 1099-NEC form reports payments to non-employees, including independent contractors, freelancers, and professionals, to the Internal Revenue Service (IRS).

 

In a previous episode, I explained the who, what and how to file 1099-NECs for your business.

 

Today I will identify critical information for those that missed the deadline.

 

How to File An Extension For Missing the January 31 Deadline

 

Your 1099s and W-2s should have been e-filed on postmarked by January 31.

 

If you missed the deadline, you should have, or you need to file an extension.

 

Your business can request a 30-day extension by submitting IRS Form 8809. The form should have been submitted by January 31, but you can still send it in. It is not guaranteed that the IRS will accept the form if submitted after the deadline. 

 

Also, the IRS will not automatically grant small business owners an extension. Form 8809 can not be filed electronically; it must be mailed to the IRS.

 

I have included the address below.

 

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201-02093

 

If you also need an extension for giving the 1099-NEC and W-2 forms to the recipients, you can fax a letter to the IRS by January 31. The fax address is also included below.

 

Internal Revenue Service Technical Services Operation

Attn: Extension of Time Coordinator

Fax: 877-477-0572

 

Include your payer name, address, and tax ID number. State the type of return you're requesting an extension for and that you're submitting a request for providing statements to employees. Explain the reason for the delay and have your authorized agent sign the form.

 

Penalties For Late Filing Of W-2s and 1099-NECs

 

The IRS can impose penalties for filing the W-2s and 1099-NECs late. They can also impose penalties for filing the forms incorrectly or incompletely. 

 

Typically, the penalties are based on how late the forms were filed and are imposed per form. For example, if you file 20 1099-NEC late, you will pay the penalty for each form.

 

If a form is considered incorrect or incomplete, the taxpayer ID number must have been missing, or you included the wrong taxpayer ID number on the form.

 

How To Avoid Penalties For Filing Late

 

If you can show a reasonable cause for your failure to fail on time, the IRS may accept the excuse and waive the penalty.

 

Also, if you have what the IRS calls "inconsequential error or omission," meaning your failure to either file on time or the errors made on your form does not prevent or hinder the IRS from processing the forms, you may have your penalties waived.

 

What Is the Penalty Amount For Filing To File 1099-NECs and W-2s?

 

Typically the penalty is $50 for each form filed late if you correctly file the form within 30 days of the due date.

 

If you correctly file the form after 30 days from the due date, the penalty amount increases to $110 for each late form filed by August 1. 

 

After August 1 for the 2021 (and 2022) tax year, the penalty increases to $280 for each late form. 

 

If you disregard the deadline and late filing deadlines altogether, the penalty will increase to $560 for each form.

 

Bottom Line, who wants to pay penalties to the IRS? As a CFO for several small businesses, I can tell you that you are wasting money if you are paying penalties for anything!

 

Monies that you could be investing back into your business to scale to 7-figures and beyond. 

 

Therefore, I recommend:

(1) Hiring an accountant who is well aware of the many tax and filing deadlines. 

(2) Maintaining an accurate, reliable, and timely accounting system. 

(3) Gathering the 1099 and W-2 information months in advance so that you are not scrambling at the last minute to meet the deadline.

(4) If you've missed the filing deadline, file the forms as soon as possible to reduce penalties and interest.

 

This financial worksheet will help you gain financial clarity and control while positioning your business on the path to maximize profits and cash flow while eliminating money worries!

 

If you need assistance creating your 2022 business plan, click the link below to download our free Profit Plan today.

 

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