1099 and W-2 filing changes for 2016

What is changing?

Beginning for the 2016 tax year, employers reporting non-employee compensation in Box 7 of Form 1099-MISC and are required to file electronically (250 or more informational returns) must file with the Internal Revenue Service by Jan. 31, 2017. This is a change from prior years when the due date was March 31.

Am I required to file a Form 1099-MISC?

If you paid more than $600 to an independent contractor during the 2016 tax year, you may be required to file a Form 1099-MISC for that contractor. The IRS provided guidance entitled Independent Contractor (Self-Employed) or Employee to help you determine whether a payee should be treated as an independent contractor or an employee.

What are the penalties for incorrect or late filing?

If you incorrectly file informational returns, or if you fail to file, you may be subject to the following penalties:

  • For failure to file a return, you may be subject to a penalty of:
    • $50 per form if the failure is corrected within 30 days of the required filing date
    • $100 per form if the failure is corrected 30 days after the prescribed filing date, but by Aug. 1 of the year the required filing date occurs
    • $260 per form if the failure is not corrected by Aug. 1 of the year the required filing date occurs
  • If an informational return is not filed timely or if the return fails to include all the information required to be furnished or contains information that is inaccurate, and such failures are considered intentional disregard of the filing requirements, you may be subject to a penalty of $500 per form
  • If you are required to file information returns electronically and you file paper forms, not filing electronically is considered failure to file forms and the penalty can be as high as $50 per return

Get assistance with filing

Contact your tax professional to help you prepare and electronically file your 1099 and W-2 forms.

For more information on this topic, or to learn how Baker Tilly tax specialists can help, contact our team.

The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely.  The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.