We have important information to share regarding changes to 1099 and W-2 reporting. Please read through this information carefully and contact us with any questions you may have.
Starting this year, 1099s and W-2s must be submitted to the government by January 31.In the past they were required to be issued to the individual by that date but were not required to be sent to the government until the end of February. This had allowed for a little breathing room as well as the ability to make any corrections before submission.
With this change, the penalties for not issuing and/or submitting 1099s and W-2s are becoming more onerous. A missed form that is neither issued nor submitted would actually result in two separate penalties. Accordingly, the following penalties would be double for any required forms that were neither issued nor submitted:
· $50 per form within 30 days of the 1/31/17 original due date
· $100 per form between 3/1/17 and 8/1/17
· $260 per form after 8/1/17
· $530 per form for an intentional disregard of the rules
· There are also potential correctness penalties
A more-than-2% shareholder’s health insurance MUST be in box one of the W-2 to be deductible to the business. This also applies to family members of shareholders. Included for this purpose – spouse, children, grandchildren, and parents.
To be deductible, the 2% shareholder/partner needs to be reimbursed for the Medicare or other health care premiums they pay personally. Once reimbursed, these amounts still need to be added to the W-2 or reported as guaranteed payments to the partners.