Follow our checklist to prepare your business’s year-end W-2 and 1099 forms.
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With year-end approaching fast, it's crucial to ensure your year-end processes are well underway. To assist you in your preparations, we have created a comprehensive checklist specifically designed to help you navigate the processing of W-2 and 1099 forms.
This invaluable resource will serve as a tool for your team as they complete the year-end process. So, let's dive into the checklist and get your year-end tasks on track.
Before you start, it’s best to set your internal processes for year-end. By doing so, you set your team up for success and avoid confusion over how things will be handled. Start by considering the following questions for your year-end team.
How will you be completing your W-2 and 1099 forms?
There are several options available for handling the forms processing, each with its own benefits. You can choose to manually complete the forms, utilize your accounting software for streamlined processing, employ dedicated tax preparation software, or opt for pre-purchased W-2 forms for convenience. Consider the most suitable method for your specific needs and preferences.
How will you distribute your W-2 and 1099 forms?
Each form involves multiple copies that need to be issued to various recipients, including the IRS, the SSA, and the respective workers. To ensure an efficient distribution process, your business should carefully consider the most suitable method for delivering forms to every party involved.
It's important to note that the IRS and SSA have specific e-filing thresholds that must be met. If your business is submitting 10 or more information returns within a calendar year, e-filing with the IRS is mandatory. Similarly, for the SSA, e-filing is required if you have 10 or more forms to file.
When it comes to your employees, it's crucial to distribute their forms according to their preferences. By default, employees should receive a paper copy. However, if your company utilizes a self-service portal and has provided the option for employees to electronically receive their forms, you may do so with explicit permission from the employee.
What are the due dates for each form?
Different form types come with specific deadlines that must be adhered to. It is of utmost importance for your team to be well-informed about each deadline so that your business can effectively fulfill your obligations for form distribution.
W-2 Deadlines
- January 31: W-2 Forms must be distributed to the IRS and to each employee. A copy must be submitted to the SSA if filing on paper or filing electronically.
1099 Deadlines
- January 31: Generally speaking, 1099 Forms are due to the recipient at this point.
- February 28: Copies must be sent to the IRS if sending by mail.
- March 31: Copies must be sent to the IRS if submitting electronically.
Note: Form 1099-NEC must be filed to all recipients by January 31. Other 1099s may have individual deadlines that you can confirm on the IRS website.
Preparing the information and data you need to fill out your forms is another crucial part of the forms process. The following will help make sure everything stays on track.
Ensure you Have Correctly Classified Workers
Before preparing to distribute and file forms, ensure you have accurately classified your workers. Proper classification is essential to comply with tax and labor laws. The IRS has a comprehensive guide on how to do this correctly.
Confirm you Have Proper Documentation
When preparing W-2 and 1099 forms, it is essential to have the necessary information from both employees and independent contractors to accurately complete their forms.
- For Employees: As an employer, it is mandatory to have a W-4 form on record for all employees. This form contains personal information about the employee and details their federal income tax withholding information.
- For Independent Contractors: Verify that you have an up-to-date W-9 form for each independent contractor. This form should include the contractor's contact information and taxpayer identification number. Additionally, gather all relevant payment documentation from the duration of their contract period.
Gather Essential Payroll Information
To effectively complete forms W-2 and/or 1099, it is crucial to have relevant information about your company as well as your contractors or employees. Ensure that the following information is readily available for your team.
Employer Information
- Employer ID number (EIN)
- Business name, address, and zip code
- State tax ID number for the business
Employee/Contractor Information:
- Full name, address, and Social Security Number (SSN) or Taxpayer Identification Number (TIN)
- Total amount paid to the employee/contractor, including wages, tips, and other compensation
- Amount of federal income tax withheld
- Social Security wages (refer to SSA Fact Sheet for guidance)
- Medicare wages
- Employee tips paid
- Benefits provided
- State-specific information, such as wages and tips paid and whether state income tax was withheld
- Local wages, tips, and local income tax information
By gathering and organizing this essential payroll information, you streamline the process and help your team meet the necessary reporting requirements accurately and efficiently.
Now that all your data is prepared, it's time to wrap up the process. Your team should complete each form thoroughly, adhere to filing requirements, and ensure comprehensive record-keeping throughout this stage.
Complete Each Form
Based on your chosen method for completing your W-2 and 1099 forms, it's time to proceed. Utilize the gathered information to thoroughly and accurately fill out each form.
Filing the W-2 and 1099 forms with the SSA/IRS
Once the forms are complete, follow these steps:
- Provide copies to recipients: Ensure timely distribution of copies of the W-2 and 1099 forms to the respective recipients.
- Submit forms to the IRS: Mail the W-2 and 1099 forms to the appropriate addresses provided by the IRS or take advantage of electronic filing options if suitable.
- File Form W-3 (W-2 forms only): Prepare and file Form W-3, which consolidates the information from all W-2 forms. This form must be submitted to the Social Security Administration (SSA) along with Copy A of the W-2 forms.
- Keep copies for your records: Make copies of all filed forms and associated documents, ensuring you maintain them for future reference and potential audits. These records serve as vital documentation.
- Review state requirements: Familiarize yourself with specific state requirements for filing W-2 and 1099 forms. Some states may have additional forms or deadlines that must be followed. Ensure compliance with all applicable regulations.
Streamline Your Year-End Forms with Greenshades
Simplify your year-end process with Greenshades’ all-in-one solution that covers W-2s, 1099s, and other year-end forms. With automated data population, the tedious task of filling out year-end forms becomes effortless. Just review the data and distribute the forms with ease.
When it comes time to distribute your forms, choose between convenient print and mail services or empower your employees with instant access to year-end forms through our user-friendly self-service portal. We can also handle the filing of your forms to the IRS or SSA, ensuring compliance and saving you valuable time and effort.
This checklist provides a solid foundation for preparing your W-2 and 1099 forms. If you're interested in leveraging Greenshades' expertise in form processing and other employee self-service solutions, reach out to us today.
