Business owners are facing heavier burdens every year when it comes to tax preparation. According to the NSBA Small Business Taxation Survey, businesses are spending more money and time preparing their taxes while staying in compliance with the Internal Revenue Code laid out by the IRS With the increasing complexity of tax laws, it's critical for businesses to start planning for and preparing their taxes as early as possible.
There are several key steps for businesses to take throughout the year. Just as employees fill out W-4s before starting work, contractors should fill out their own tax form, Form W-9, before performing any services for businesses. As the year draws to a close, these W-9s should be compared against records to ensure all data is complete and accurate. Similarly, employers should speak with employees to ensure their W-4s are up to date and the correct amounts are being withheld.
Once January hits, it's crunch time for businesses and tax preparers. Recipient copies of W-2s and most 1099s need to be mailed by January 31st or, if this date falls on a weekend, the following business day. February 17th is the due date for remaining 1099s (1099-B, 1099-S and certain 1099-MISC forms) to be mailed to recipients. If there are any errors, Corrections forms should be filed prior to the March 31st due date for W-2s and 1099s to be e-filed with the SSA and IRS, respectively. For those still paper filing, the deadline is much sooner: by February 28th, 1099s must be filed with the IRS and W-2s with the SSA.