With year-end approaching at great speed, we at Greenshades have been doing a series of webinars revolving around all things year-end. On one of those webinars, we had an attendee ask if we had a check list that could be used to get ready to process W-2 and 1099s forms. At the time, I thought that we did. After some looking around it turns out I was wrong. However, it was such a great request, I put this checklist together and wanted to make sure that everyone was able to use It as a resource.
Getting ready for W-2 and 1099 Forms
1. Correctly Classify Workers as Employees
It’s very important that you have classified your workers correctly before getting ready to distribute and file forms. The IRS has a wonderful guide on how to do this correctly. They start off by outlining two scenarios that you will be able to use to find out where you fall in the world of employment.
The Common-Law Rules can be used to help determine if a worker is an employee or a independent contractor. Do know though that they are not a perfect key for making the determination. Looking at the overall relationship is the best way to make the best decision.
After looking at the worker and employer relationship, if you are still unable to decide you may use form SS-8. Form SS-8 can be filled out by the worker or employer and submitted to the IRS. The IRS will then review the details submitted on the form and make an official ruling.
See Also: Where is My W2 Form? (How to Get a Copy)
2. Be aware of due dates for distribution and filing
As most of the folks reading this blog will know there are deadlines for forms depending on the form type. Remember that last year the IRS changed some due dates for forms to try and help cut down on forms fraud. IRS Date Reminder.
3. Confirm you have a W-4 form on file for employees
As an employer, you are required to have a W-4 form on file for employees always. If you are still doing this the painful way on paper I highly suggest that you consider our HR documents module on Greenshades Online. We can store these federal and state W-4 forms for you electronically and employees can update them online.
The IRS made a few changes this year around the federal W-4 form for 2018. This was for the lower tax rates and under-withholding.
4. W-2 Forms Need Payroll Information
You will need some information on your company and information about your contractors or employees.
- Your Companies employer ID number.
- Name, Address and Zip code for the business location
- The companies state tax id number
- Employee Name, address and SSN or TIN
- Amount paid to the employee/contactor. Total wages, tips, and other compensation
- Amount of federal income that was withheld.
- Social Security Wages. SSA Fact Sheet.
- Medicare Wages
- Employee Tips Paid
- Benefits paid
- State information such as, wages and tips paid. Was their state tax income withheld?
- Local wages, tips and local income tax
5. How will you be processing your W-2 and 1099 forms?
There are a few different ways to handle the forms processing. You can do it manually, use your accounting software, use a tax preparation software or use pre-purchased W-2 forms.
Greenshades has availability to all the above options except for the manual one. We can even handle the filing of the forms to the IRS or SSA.
6. How will you distribute your W-2 and 1099 forms?
Remember that you must have your W-2 forms and some 1099 forms to/postmarked employees or contractors by January 31st. If you are a current Greenshades Online client, you should have a handy list of employee consents to help with W-2 forms distribution.
W-2 forms can either be distributed electronically to employees or printed and mailed to employees.
1099s can only be printed and mailed to contractors by Greenshades.
Our print and mail pricing starts at less than $1 for the beginning of January and increases depending on when the forms are uploaded to Greenshades and released for distribution.
7. What should you do if an employee or contractor loses their form?
Depending on how you distributed your forms dictates the answer. If you are using a service such as Greenshades Online an employee and login any time during the year and download their W-2 on their own, alternatively an administrator for your company could also do this form them.
For 1099s the same answer applies, except that contactors/vendors are not able to get their 1099 forms on their own. They will need to contact the company that they worked for a request a reprint.
8. Filing the W-2 and 1099 forms with the SSA/IRS
Hopefully you are filing online. Using Greenshades makes this easy as the filing can be done directly online with the click of a button.
This is a great starting list of points to think about when getting ready to process your W-2 and 1099 forms. If you are interested in how Greenshades can help with processing forms and many other employee self-service, call us at 888-255-3815 or Sales@Greenshades.com.