If you are an employer, it’s your obligation to provide the IRS and Social Security Administration (SSA) with relevant payroll information. This includes information provided through Forms W2, W3, 1099-MISC, and your fourth-quarter 941.
The IRS requires employers submit their 2017 wages and payments report, along with summary reports, by January 31, 2018. The deadline is the same whether you file electronically or by paper.
In the past, the SSA, had two different deadlines depending on whether you file electronically or by paper. Preferring that employers file electronically, the deadline to e-file W2s and W3 was the end of March, whereas the paper filing deadline was the end of February. Note, however, the rule recently changed, and the deadline to file with the SSA is now also January 31, 2018. The deadline is the same for both paper and e-filings.
Getting an Extension
Along with changing the filing deadline rules, the IRS more recently changed how and when it will grant employers an extension to file necessary forms. Employers may request a 30-day extension only after filing Form 8809, and the IRS no longer grants automatic extensions.
Which Forms to File
You will need to file different sets of forms with the IRS and SSA. The types of forms you file will also depend on whether you had employees with wages or whether you made payments to non-employees (e.g., independent contractors).
If you have employees that earned wages, both the IRS and SSA require that you separately submit copies of employees’ W2 forms. You must also provide employees with copies of their W2s. Next year’s deadline for submitting W2s to all of these parties is January 31, 2018.
Before submitting W2s, it’s very important to verify the data on the forms. Otherwise, you can incur a penalty for missing forms and/or incorrect information. You may correct mistakes by filing Form W2c, but it’s infinitely better to not make mistakes in the first place. Data to check include:
- Employee data, including the correct spelling of names and social security numbers.
- Wage, tax withholding, and benefits data, including verifying the tax withholdings of former employees.
- Withholdings for any taxable fringe benefits within the last pay period, like bonuses and parking.
Along with W2s, employers must the submit information on Social Security and Medicare taxes to the SSA through Form W3. Issues to look out for are:
- Ensuring that the amounts on the W3 are consistent with that of W2s.
- Ensuring consistency between the amounts on the W3 with your four quarterly 941 Forms pertaining to income tax withholding, social security wages and taxes, and Medicare wages and taxes.
- Keeping records to later show the IRS or SSA why amounts do not match up, even if the reason is valid.
If you made payments out of your business to non-employees, you will file Form 1099-MISC for each person you made payments to by the end of January. Qualifying payments include at least $600 in:
- services performed by independent contractors;
- medical and health care payments; and
- attorney fees.
Although it’s an employee’s responsibility to fill out a W4 for tax withholding purposes, good employers usually have employees fill out a new W4 before the end of each calendar year. Changes in personal and/or financial circumstances can make a big difference on their withholding amount. This includes getting married, having children, or becoming a head of household.
While you can accomplish the filings on your own, keeping up with frequently changing rules and deadlines can make for an extra headache you’d rather avoid over the holiday season and through the new year. If that’s the case, we would recommend hiring an expert to handle the payroll filing. When finding an expert to manage your payroll, make sure to hire a tech-savvy accounting firm that uses the latest software. These are designed to allow for more accurate and expedient filings, so that business owners don’t later find themselves being hassled by the IRS or SSA and/or paying penalties for mishaps.