W-2 and 1099 Pitfalls, Tips & Deadlines

W-2 and 1099 Pitfalls, Tips & Deadlines

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calendarThe Sun-Herald.com reports that Greatland, one of the country’s leading providers of W-2 and 1099 products for business, has released its top W-2 and 1099 filing “pitfalls” to watch out for this tax season:

Paper filing

While many businesses are electing to e-file their W-2 and 1099 forms with the Social Security Administration (SSA) and / or the Internal Revenue Service (IRS), the majority of businesses still rely on filing paper forms via mail. There are two common missteps businesses or tax preparers make when filing paper W-2 or 1099 forms:

1.  Seeing red - the 1099 red ink form requirement: businesses must file Copy A of form 1099 (the file that is sent to the IRS) on a pre-printed red ink form(1). Only Copy A must comply with this requirement. All other copies of the forms can be printed with black ink.

2.  Perfecting perforation on W-2s and 1099s – similar to the red ink form requirement, the IRS and SSA have a perforation requirement that specifies all paper forms contain no horizontal perforations separating forms on Copy A. However, all other copies must be perforated between the individual forms, and according to the IRS, the use of scissors to separate copies is not an acceptable method. It is important to verify with your tax form provider that all pre-printed paper forms comply with IRS and SSA requirements. Failure to comply with these requirements can result in substantial penalties.

If you file by mail, make sure you send the forms certified mail, return receipt requested in case your forms get lost in the black hole we civilized humans call bureacracy.

Electronic filing or “e-filing”

Both the SSA and the IRS encourage e-filing of W-2 and 1099 forms, no matter how few forms need to be filed. However, if the number of forms of each type totals more than 250 (e.g. 250 1099-DIV 300 1099-INT, 250 W-2), the IRS and SSA require the forms to be filed electronically.

The benefits of filing electronically are: 

  • The deadline for filing forms with the IRS and SSA is extended by one month, compared to paper filing
  • Paper handling and mailing is reduced, resulting in possible cost savings  
  • Reduced environmental impact
  • None of the federal copy paper form requirements (red ink, perforation, etc.)
  • The submission status of your filing is provided (e.g. “Received”, “Not Yet Processed”, “Complete”, etc.)  

Filing Deadlines

  • The deadline for W-2 and 1099 forms to be provided to recipients is Feb. 1, 2010.
  • This year’s deadline for W-2 and 1099 filing with the IRS is March 1, 2010 (paper) or March 31, 2010 (electronic).
  • You may request an automatic 30-day filing extension by completing form 8809.
  • New for 2009: the due date for furnishing statements to recipients for forms 1099-B, 1099-S, and 1099-MISC (if amounts are reported in boxes 8 or 14) has been extended to February 16, 2010.
About Peter Pappas

Peter is a tax attorney and certified public acccountant with over 20 years experience helping taxpayers resolve their IRS and state tax problems.

He has represented thousands of taxpayers who have been experiencing difficulty dealing with the Internal Revenue Service or State tax officials.

He is a member of the American Association of Attorney-Certified Public Accountants, the Florida Bar Association and The Florida Institute of Certified Public Accountants and is admitted to practice before the United States Tax Court, the United States Supreme Court, U.S. District Courts - Middle District of Florida

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Comments

  1. What is the penalty for a company if they don’t send out a 1099 on time (such as 2 months late)?

  2. Keith,

    The basic late filing penalty is $50 per 1099, per month. But try to get them out on time because the recipients need the forms to do their tax returns which are due April 15th.

  3. What if you do not get your W-2 by the 1st of February? What are the responsibilities of the tax payer in this case?

  4. Josh,

    Thanks for visiting.

    You don’t have to file your tax return until April15th, but if you are expecting a refund you’ll probably want to file sooner.

    You should call your employer or former employer and find out whether they’ve sent the W-2′s out or not.

  5. I have the red copy of the 1099 misc. Am I understanding correctly that I can fill this out and then just make copies of it for the recipient?

  6. what about if you received a 1099 form today, february 5th, 2010? i didn’t include it in my taxes, done online already… the amount is slightly over 2300.00 —??

  7. Rosemary,

    You should file a form 1040-X to add the additional 1099 income (assuming it’s taxable).

  8. As a recepient, must the 1099 be filed the same year it is received? Can it be held off until a future year to be filed?

  9. The 1099 must be issued to the recipient by January 30th and filed with the IRS by February 28th of the year following the year of payment.

  10. What are the penalties to an employer for not mailing out W-2 forms by the deadline?

  11. I have rent my house to a couple last year. They used it as a business (against our lease agreement), they want to issue a 1099 today March 20 2010, but I have already filed without it. What era my options today?

  12. Claire,

    You must report the rental income regardless of whether you received a 1099 from the tenant or not. You need to file an Amended Tax Return on Form 1040x to correct the problem.

  13. Thanks.

  14. As of today, we still have not received our W-2′s. I don’t want to “blow the whistle” on my company, but I don’t see any other recourse to pressure someone to get my W-2. What can I do?

  15. Rob,

    If you have your last paystub it should contain your year to date earnings and tax withholdings and you can use that to prepare your tax return.

  16. I’m thinking of claiming 9 dependents for a couple of months to get some extra money, though I actually do not have any dependents. I know this is fraud, and federal time, but i feel comfortable that i will not get caught. What I want to know is when i file my return next year i will not mention this, is there any way they will catch it?

  17. Lewis,

    When did the qualude kick in?

  18. I got paid about 175usd by an agency for a service I rendered in 2009. I asked for a 1099 but wasn’t given by the said agency bcoz accordingly, I didn’t earned more than 600usd. If that is right what will I used to report the 175usd in filing income tax? I am going to file taxes jointly with my husband. Thanks!

  19. Pearl,

    It is right and you don’t need a 1099 to file your tax return. Since you already know the amount you were paid, just include it it in the appropriate place on your return.

  20. Thanks!

  21. I do contract work and send in estimated taxes. Thru 2009 I made $X dollars and I use the date that I receive the check for the tax issue. While my 1099 is dated 12-30-09, I did not receive pay until the 4th of January. Their check was dated Jan 1 and I am told that is just the day it was processed and to use the 1099 date. Fact: income not received until 2010 — do I pay taxes for 2009 on this 2010 income??

  22. Edward Reid says:

    Will,

    Your choice. This has happened to me many times, often intentionally. The company pays on Dec 30, so it’s an expense in that year for them. You don’t receive it until Jan 3, so it’s income the next year for you. This is completely legal as long as both use the cash method for accounting — in fact, if the check is in the mail over New Year’s, this is technically the only correct way to report it. In any case, note that the 1099 is advisory.

  23. I’m a notary mortgage closer and did not receive my 1099 from one of the main title companies I contract with. When I called to ask about it, they told me the deadline is Feb 28th and they will not send them out until that time. I’ve got all my taxes done except for the info for this one 1099, so I’m a little frustrated. Is this correct?

  24. din,

    I need more facts. The nature of your relationship with your employer determines whether or not you are an independent contractor or employee.

  25. i am an employee,a caregiver but i dont want to file w2 this year 2011,i want 1099 like i filed last 2009,is it ok to file 1099 for 2011.

  26. din:

    Still don’t have enough information and it’s irrelevant that you don’t “want” to file a w-2.

    But I do like your name because it reminds me of one of my favorite Rudyard Kipling poems:

    Din! Din! Din!
    You Lazarushian-leather Gunga Din!
    Tho’ I’ve belted you an’ flayed you,
    By the livin’ Gawd that made you,
    You’re a better man than I am, Gunga Din!

  27. I got a w-2 from my employer and i also got a 1099-misc and don’t know why. When i file, do i have to include the 1099-misc? I will loose over half of my return if I do.

  28. If the 1099 is incorrect, call your employer and tell them to issue a corrected one. You don’t have to report what you didn’t get.

  29. My wife worked for a woman who preferred to pay “under the table” but is now wanting to send her a 1099 form. She got a check from her for $1200. If she has no information about my wife other than an address, can she actually send her this form, and does my wife have any other options here?

  30. I’m waiting on a 1099 for my mutual fund and I still haven’t received it. I’ve contacted my advisor but seem to be getting the run-around. When is the deadline for the company (a big-name bank) to have it available?

  31. i am an independant contractor — recieving the last few months of my edd in california. i did some work in the last quarter of 2010 but didn’t fill out the 1099 till 2011, but then the client paid me 2011 and sent the 1099 for 2010 — but by this time i had already NOT reported the income to the edd because i didn’t know when i was going to be paid and i figured it would be reported as 2011 income.

    what should i do? contact the edd?

  32. Hi, I was a tech support contractor for a brief period in which my services rendered were done in 2009, but I was paid in Jan 2010. When I got my check I was waiting for my 1099, but I never received it. As a result, I filed my taxes as self employment income based off of the check I received. Now I just received a 1099 in 2011. Do I need to file again?

  33. Let’s say I am between jobs and just recently filed my w-2. This was the first time I filed my own taxes. After I filed my w-2, I received my 1099 from withdrawing from my 401 k. Never a good idea (i know) but time were tough and necessary to do so. Would I be able to file my 1099 after the fact still? Is it normal to ask for an extension for filing my 1099 after I already filed my w-2? Please advise..I hope this makes sense.

  34. Toni,

    I assume you are referring to your tax return when you say you filed your W-2.

    If you already filed, you need to prepare and file a form 1040X – Amended Tax Return – to include the 1099 income you failed to report.

  35. Coreen,

    If there is a material difference between what you reported on your return and the amount on the 1099, you should consider filing an amended return on form 1040 X.

    If you already reported and paid tax the income shown on the 2011 1099, you should include the 2011 1099 information on your 2011 return and show an offset for the portion of that 1099 that was reported in a prior year.

    It’s a little tricky so you might want to hire someone to do your return for you.

  36. sweetpea65 says:

    We have a garage/used car lot and my husband is just “getting around” to filing our business/personal taxes. He is saying the CPA (a close friend) says we won’t get a return this year because we didn’t file the 1099 in time this year. We have gotten good returns in the past-we have morgtage and two kids so we have plenty of deductions plus business was NOT good this year. Difference is he promised the return to me for a vacation so I’m worried that his information isn’t correct!! PLEASE HELP!!

  37. Hi! So aggravated… a company is sending me a 1099 NOW… April 20th… for 2010. Of course I already filed. And I reported the income, though I didn’t have a 1099 for it. What now? Do I still have to file an amended return and pay my accountant to handle it? Is that even legal for them to send me a 1099 now??

  38. You have to report the income you earned regardless of whether you get a 1099 or not.

    It seems you did that so you have nothing to worry about assuming, of course, that the amount you reported is the same as what is shown on the 1099.

    If the 1099 has a different amount and it’s accurate, you should file an amended return to correct it. If the 1099 is inaccurate you need to contact your employer and see if they will issue an amended 1099.

    Good luck.

  39. I need to know if I have to file my tax returns without getting my W2 form. Thanks in advance for any help.

  40. Fred,

    Yes, if you know how much you made and how much was withheld. I would attach a statement to the return explaining why you have not attached the W-2s.

  41. Peter, looked through your site and it is very informative – Thanks! The TX software consulting company I started in 2003 converted it’s 2 sub-contractors into employees Jan 2010 (Billing cycle Jan-Dec) and kept paid them as employees throughout 2010. The company withheld taxes and remitted them to the government via EFTPS. However we failed miserably at meeting the filing deadlines for sending our 2010 W2 information to the IRS and have yet to do so as I write this. How do I send them now?
    Thanks!

  42. I work for a catering company 3 or 4 days a month. They issue 1099 for the taxes. I was just told to expect it some time between now and April 15th. They were serious. IS this legal? What is the deadline to receive this form for 2012 tax filing? What are my options? I need to file immediately for the expected return and college apps.

  43. The deadline is January 30th. You don’t need the form to do your taxes if you know how much money they paid you.

  44. My former employer has not sent my 1099, again, mid February to mid March seems to be his speed, or the time he needs to doctor his books. Who do I report this deadbeat to?

  45. Tim,

    Check out the IRS website at IRS.org. It should tell you what to do.

  46. Terri Jackson says:

    I have a client that has a 1099 for 2007, 2008, 2009, 2010. She has not files her taxes since 2006. What do I do to make sure the IRS have her taxes even though they are late? What about those 1099s? Thanks

  47. I am a independent contractor, they have not sent me the 1099 yet, and its feb 11, is there a way to report them so they will get penalty?

    Also they want me to send them a w9 form (just now feb 11), do i need to send it to them while they already have my SSN ?

  48. rachel,

    If you know how much they paid you in 2011, you don’t need the 1099 to do your return. If you report them for not sending you the 1099, they may use the fact that you didn’t send them a w-9 as a defense.

  49. I went off the payroll for a month and two weeks so that I could have some extra money to get some bills paid and have a little christmas money for my daughter to have a few presents. My employer has not done any 1099 on me yet. I want to report this income. What if my employer who is going to close the company does not file any 1099′s? Should I report him or leave it alone?

  50. Milly,

    You shouldn’t report him. Do you know how much money he paid you? If you do, just report it on your return.

    By the way, you can’t just go “off the payroll” to save some extra money. You are either an employee or you aren’t. If you are, everything you are paid should be as a w-2 employee.

  51. I did some freelance work in 2011 and was paid for it out of their business account $2000. Now they are mentioning in Feb. that they want to 1099 me and asked me to send my SSN to their accountant.

    #1 – Aren’t they past a deadline. Should they be paying penalties?
    #2 – Am I obligated to provide my SSN after the fact? Shouldn’t they have done this up front.
    #3 – Can I just claim the income on my tax return as self-employed and tell them to go F-off. I don’t want to deal with them anymore and I’m not giving out my SSN.
    #4 – Anything else I can do to be a jerk about it?

  52. I was employed for a brief period for my mother in law. We did not part on good terms… Under her business she sent me a w-2 for my time as her employee. THe amount there is accurate for my earnings. About 3 weeks later she sent me a 1099-misc. I’m not 100% sure where the amount she lists is from. She did make some personal gifts to cover some expenses for my son, but even those don’t amount to the full number on the 1099 (and were given as a gift). What should I do with that 1099? Both because I thought you couldn’t do a 1099 on an employee, because the amounts she gave were gifts, and they aren’t even accurate as to any of the above scenarios. Any advice would be good.

  53. I am a DJ, so my income is usually reported as a 1099. I got my W2′s in January, and I filed last week (in February). I just got a message today from older employers I had forgotten about saying they will be sending their W2′s shortly. Keep in mind it is almost March. I didn’t plan on anymore income to report as it is long past Jan 31st. What is expected at this point with a refund already on the way?

  54. I just won a contest from a clothing company for $1,000 worth of clothes and they sent me a 1099 Misc. tax form to fill out. What portion of it do I fill out.

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