Attention Small Business Owners: W-2 & 1099-NEC Deadline Approaching Fast!

The 2025 tax season is here, and an important deadline is just around the corner! If you run a business, make sure you’re prepared to submit necessary tax forms to the federal government and provide them to workers by January 31, 2025. Here’s what you need to know:

Forms You Need to File

1. Form W-2 (Wage and Tax Statement)

• This form reports the wages you paid and taxes withheld for each employee during the year.
• It must be provided to employees and filed with the Social Security Administration (SSA).
• The IRS stresses the importance of filing Form W-2 accurately and on time, as it affects employees’ Social Security and Medicare benefits.

2. Form W-3 (Transmittal of Wage and Tax Statements)

• If you file Form W-2, you must also submit Form W-3 to the SSA.
• This form summarizes the totals from W-2 forms and ensures they align with other employment tax forms like Forms 941, 943, 944, or Schedule H.
• Late or incorrect filings may result in penalties.

For Freelancers & Independent Contractors

3. Form 1099-NEC (Nonemployee Compensation)

• If you’ve paid independent contractors or freelancers, you must file Form 1099-NEC.
• This form must be sent to both the IRS and the recipient if all the following conditions apply:
  1. You paid someone who isn’t your employee.
  2. The payment was for business-related services.
  3. The payment went to an individual, partnership, estate, or in some cases, a corporation.
  4. You paid them $600 or more during the year.

How to Send These Forms

• Forms can be delivered in person, electronically, or by first-class mail to the recipient’s last known address.
• If mailing, ensure the postmark is no later than January 31, 2025.

Additional Forms to Consider

• Form 1099-MISC may be required for payments related to rent, medical expenses, prizes, awards, attorney services, and more.
• The deadline to furnish Form 1099-MISC to recipients is also January 31.
• If filing with the IRS:
  • Paper filing deadline: February 28, 2025.
  • Electronic filing deadline: March 31, 2025.

Act Now to Avoid Penalties

Missing deadlines or submitting incorrect information can result in penalties. If you have any questions about W-2s, 1099-NECs, or any other tax forms, reach out to us today—we’re here to help your business stay compliant!