What You Must Know About 1099 Late Filing Penalty
In particular, failure to provide an accurate statement (intentional disregard) bears a penalty of $250 per 1099, with no maximum for the year.
Whereas when it comes to late filing of mandatory 1099 forms, it could lead to penalties amounting to $30 to $100 per 1099 form, and with a maximum penalty of $500,000 annually for a small business–a big amount that goes to show why it pays to be mindful of your tax-filing deadlines.
The W-2, Wage and Tax Statement is considered as an “information return” by the IRS and is essential for the reporting of the wages, tips and other compensation that an employee receives. The W-2 form also presents information on the withholding for various taxes, including income, Social Security and Medicare.
As with the 1099-MISC for independent contractors, the employment status of an individual and the nature of his or her relationship to a business dictate which form to send.
To enable accurate recording of the employee’s earnings to their lifetime earnings records, the name and Social Security number (SSN) on the form must match the SSN on the employee’s Social Security card. Later on, these data also become the basis in determining eligibility and amount of Social Security benefits.
W-2 Forms May Include Reports Of:
- Compensation (Including those in the form of vacation allowances, bonuses, severance pay, some moving expense payments, some types of travel allowances and 3rd party payments of sick pay for permanent, temporary and seasonal workers)
- Income tax withholding
- Social Security withholding
- Medicare withholding
- Other applicable withholdings (e.g. 401(k) and pre-tax health insurance)