Filing Annual Wage and Tax Reports for Tax Year 2018

One of your duties as an employer is to provide reports to employees and independent contractors showing their income from the tax year. The report for employees is created on Form W-2 and the one for contract workers is on Form 1099-MISC.

These reports are due to employees and independent contractors by the end of January the following year. Thus, wages and payments for tax year 2018 (Jan. 1, 2018–Dec. 31, 2018), the reports are due Jan. 31, 2019.

If any of these filing dates falls on a weekend or national holiday, the filings are due the first regular business day thereafter. For example, if Jan. 31 falls on a Saturday, the due date would be Monday, Feb. 2. 

You must also file copies of these reports, along with summary reports, to the IRS and Social Security Administration (SSA), for verification purposes by the end of January.

 

01
Provide Copies of Form W-2 to Employees by Jan. 31, 2019

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W-2 forms must be provided to employees by Jan. 31, 2019, for 2018 taxes. You must submit all tax year 2018 W-2 forms, along with a summary report on Form W-3, to the Social Security Administration by this date.

02
Provide Copies of 1099-MISC Forms to Non-Employees by Jan. 31, 2019

You must prepare and file Form 1099-MISC for independent contractors and businesses you pay.

Before you can prepare and send a 1099-MISC to an independent contractor, you'll need to get a W-9 form from that person to verify their taxpayer ID. 

Next, send a 1099-MISC to any non-employee to whom you've paid $600 or more during the year. Most non-employees must receive one, but there are some exceptions for who receives a 1099-MISC. 

03
File Form 1096 with the IRS (along with 1099s) by Jan. 31, 2019

Prepare and submit Form 1096 (Annual Summary and Transmittal of Information Returns) to the IRS, along with copies of 1099-MISC forms you sent to independent contractor and businesses you paid.

You must complete a 1096 form for each different type of 1099 form you prepare ​if you're submitting these forms by mail. If you file 1099-MISC and other 1099 forms electronically, you don't have to complete a 1096 form. 

04
File Form W-3 with Social Security (With W-2s) by Jan. 31, 2018

Form W-3 is a transmittal form, which summarizes the information on all of the W-2 forms you're submitting to the Social Security Administration. The W-3 form must be sent if you're submitting by mail. The transmittal forms, along with all of your employee W-2 forms, are due to the Social Security Administration by the end of Jan. 31. 

You may also be able to file these forms online using the Social Security Administration's Business Services Online portal. If you're submitting W-2 forms online, you don't need to include a W-3 transmittal form. 

05
How to Request an Extension of Time to File W-2s of 1099-MISC Forms

If you think you're going to have to file late, you may request a 30-day extension of time to file W-2s. Extensions are not granted automatically, and you will need to provide a detailed explanation of the reason for the extension. Use Form 8809 to file an extension application by Jan. 31.

The IRS says it will only grant the extension in "extraordinary circumstances or catastrophe." The circumstances are limited to those affecting the operation of the business: 

  • Catastrophic event in a Presidentially Declared Disaster Area
  • Death, serious illness, or unavoidable absence of the person responsible for filing the returns
  • Fire, casualty, or natural disaster, or
  • The business was in its first year of operation. 

Filing an application for an extension may help you avoid fines and penalties for late filing of W-2 and 1099-MISC forms.

06
Employee vs. Independent Contractor: What's the Difference?

It's important to be sure that you are paying people correctly for their type of work and to use the correct form to report wages and payments. 

The difference between whether someone receives a W-2 or a 1099-MISC to report income depends on whether the person is an employee or an independent contractor.

Generally, people are considered your employees if you pay them regular wages or salaries, they have an employment contract with you, and if you have control over the work they do. Independent contractors generally do not meet these specifications.