Additional Coverage:
- Missed the January 31 IRS deadline? Here’s all about the penalties you should know (marketrealist.com)
Missed the January 31st IRS Deadline? Here’s What You Need to Know About Penalties
The Internal Revenue Service (IRS) set January 31st as the deadline for a trio of crucial tax forms, and for those who missed the mark, the clock is now ticking on potential penalties and additional charges. Employers and businesses were tasked with submitting Form W-2, Form W-3, and Form 1099-NEC by this date. However, as the deadline has passed, not only late filers but also those who failed to request an extension, submitted incorrect forms, or neglected to provide the correct forms to recipients are now facing the IRS’s watchful eye, according to a recent Newsweek report.
These January 31st deadlines primarily pertained to employers and businesses. Let’s break down the forms in question:
- Form W-2, Wage and Tax Statement: This form is a staple for employers, who must file it with the Social Security Administration and provide a copy to each employee. It meticulously details an employee’s total wages and all deductions, including federal income tax, Social Security and Medicare taxes, and any state and local taxes, as highlighted by Newsweek.
- Form W-3, Transmittal of Wage and Tax Statements: This form acts as a cover sheet for the W-2s, accompanying them when submitted to the IRS. It provides a summary of the total wages paid and all taxes withheld across an entire organization, including Social Security and Medicare taxes.
- Form 1099-NEC, Nonemployee Compensation: Crucially, employers and businesses were also required to submit this form to report payments made to independent contractors and freelancers – those not on the official employee payroll. It’s also vital to remember that employees must receive a copy of Form W-2, and non-employees a copy of Form 1099-NEC, by the due date.
Now that the filing window has closed, employers and businesses will face fines directly tied to how late they submit the required documentation. The penalty structure begins at $60 per return if filed within 30 days of the missed deadline.
This jumps to $130 per return for filings made after 30 days but before August 1st. After August 1st, the penalty escalates further to $340 per return.
For those who intentionally disregard IRS instructions, the fine can reach $680 per return with no maximum limit. Separate penalties also apply for incorrect form submissions or failure to provide copies to employees.
Newsweek also notes that the IRS will levy interest on any unpaid penalties until the full amount is settled. Taxpayers do have the option to make a partial payment and then enroll in a payment plan to manage the remaining balance.