As we approach the year’s end, it’s time to gear up for one of the most crucial tasks for any business—processing W-2 and 1099 forms. These forms are essential for both compliance and maintaining a transparent and organized financial record.
A solid software foundation along with a helpful checklist can assist your team in tackling year-end tasks effectively. TrinSoft partners with Greenshades, a payroll, HR, and tax platform that allows you to efficiently handle various versions of W2, 1099 forms, and more in one streamlined process, ensuring compliance and timely delivery to employees and vendors. Explore how to ensure your team is well-prepared to meet deadlines and maintain compliance all season.
1. Establish Internal Year-End Processes
Before you dive headfirst into the paperwork, it’s essential to set your internal year-end processes in place. Clarity on how your organization will handle this task is vital for a smooth workflow. Here are some questions to consider:
- Form Processing Method: Decide on the method you’ll use to complete W-2 and 1099 forms. Options include manual completion, utilizing accounting software, specialized tax preparation software, or opting for pre-purchased forms for convenience. Choose what aligns best with your business needs.
- Form Distribution Strategy: Consider how you’ll distribute these forms. Remember, different copies need to go to various recipients, including the IRS, the SSA, and your employees or contractors. Ensure efficiency in the distribution process.
- Deadlines Awareness: Familiarize yourself with the due dates for each form type. Meeting these deadlines is crucial for fulfilling your reporting obligations effectively.
When are the deadlines for each form?
Each type of form comes with its own specific set of deadlines that you must adhere to diligently. To avoid fines and penalties your team should be well-acquainted with these deadlines to ensure your business fulfills its form distribution obligations efficiently.
- January 31: W-2 Forms must be distributed to both the IRS and each employee.
- January 31: In most cases, 1099 Forms are due to recipients (1099-NEC, 1099-MISC, 1099-DIV)
- February 28: If you’re sending copies to the IRS by mail, they must be postmarked by this date.
- March 31: Electronic filers must submit copies to the IRS by this date.
Please note: Form 1099-NEC must be filed with all recipients by January 31. Other 1099 forms may have individual deadlines that can be verified on the IRS website.
2. Prepare Data for Accurate Form Completion
Getting the information and data ready for filling out forms is a critical step in the process. Here’s how to ensure everything stays on track:
- Worker Classification: Ensure workers are accurately classified to comply with tax and labor laws. Refer to the IRS’s guidance on proper classification.
- Documentation Check: Gather all necessary information from employees and independent contractors to accurately complete their forms.
- For Employees: Have W-4 forms on record for all employees, which include personal information and federal income tax withholding details.
- For Independent Contractors: Ensure you have up-to-date W-9 forms for each contractor, containing their contact information and taxpayer identification numbers. Collect payment documentation from their contract period.
- Payroll Information: Compile essential payroll information, including:
- Employer Information:
- Employer ID number (EIN)
- Business name, address, and zip code
- State tax ID number
- Employee/Contractor Information:
- Full name, address, and Social Security Number (SSN) or Taxpayer Identification Number (TIN)
- Total compensation, federal income tax withheld, Social Security wages, Medicare wages, employee tips, and benefits provided
- State-specific information such as wages, tips, state income tax withholding, and local tax information
- Employer Information:
Alongside collecting employee information, consider using HR software, such as the Greenshades’ onboarding workflow or employee self-service portal to collect employee signatures for electronic consent. This allows for the digital delivery of forms to your employees for convenient access at any time. It’s important to note that if they opt out of electronic delivery, you are still required to send them printed forms by mail.
3. File W-2 and 1099 Forms
With your data ready, it’s time to complete the forms and finalize the process:
- Form Completion: Utilize the gathered information to accurately complete each form.
- Filing with IRS/SSA: After form completion, follow these steps:
- Provide copies to recipients promptly.
- Mail forms to the IRS or choose electronic filing options if suitable.
- For W-2s, prepare and file Form W-3 for the SSA.
- Maintain copies and associated documents for future reference and potential audits.
- Stay informed about state-specific requirements for filing W-2 and 1099 forms.
Take a moment to consider the options that can enhance the efficiency of your filing process. Utilizing solutions such as Greenshades, you can leverage e-file choices or delegate the process of printing and mailing forms to vendors and recipients. This can effectively reduce the need for paperwork and manual filing efforts, saving your team valuable time and resources.
Simplify Year-End Forms
It’s time to prepare for the essential task of processing W-2 and 1099 forms, crucial for compliance and maintaining financial transparency. Establishing internal processes, understanding deadlines, and gathering data accurately are paramount for success. Year-end doesn’t have to be overwhelming. With the right tools, a reliable year-end platform, and a well-organized plan, you can conquer your year-end form processing with confidence and ease. The good news is – you don’t have to do it alone.
Interested in learning how Greenshades can streamline your year-end forms processing and distribution? For a limited time, first-time users, enjoy a 20% discount on uploads when you process and file year-end forms with Greenshades. Contact us today!