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Not Business as Usual for Employers: W-2 and 1099-MISC Filing Dates Moved Up

Not Business as Usual for Employers: W-2 and 1099-MISC Filing Dates Moved Up

The Internal Revenue Service (IRS) has announced that it is making two significant changes this year, with both designed to crack down on tax fraud. One will have a direct effect on taxpayers, shifting the earliest date that the agency will issue tax refunds, and the other will affect employers, shifting the deadline for the issuance of W-2 and 1099-MISC forms. It is hoped that each of these changes will provide the IRS with more opportunity to identify tax cheats.

The first change addresses the impact that fraudulent returns submitted by scammers have had on IRS operations. In the past, the IRS’ willingness to send out tax refunds early has prevented them from being able to verify the information submitted to them. This has made it easier for fraudulent filers to use stolen identifications in order to steal other people’s refunds.

By delaying the issuance of refunds that are based on either the child tax credit (CTC) or the earned income tax credit (EITC) until February 15th at the very earliest, the agency is giving itself time to compare the income and withholding information provided by employers to that reported on the tax return.

The second change will require additional effort from employers in that it requires that they have their W-2 and 1099-MISC forms ready and sent out to the government much earlier. Where in previous years manually transmitted forms had to be sent in by February 28th and electronically transmitted forms by March 31st, now the agency is requiring that the government is sent their copies of the 2016 W-2s and 1099-MISCs by January 31st, 2017.

This addresses another fraudulent activity – the filing of returns that indicate incorrect withholding and income. The dates are now in sync with when companies have always needed to have these forms in the hands of both their independent contractors and their employees. Where companies file 1099-MISC forms for employee compensation, the earlier filing date does not apply – it is only applicable to non-employees 1099-MISC forms.

Where there was once an automatic 30-day extension available for the filing of W-2s, that is no longer available. Instead, filers or transmitters will have to request extensions, and these will only be granted in very limited circumstances based upon requests that demonstrate an extraordinary reason as to why an extension is needed.

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Sherri Hastings

Sherri Hastings

Tim Murphy is the managing member at Murphy & Murphy, CPA, LLC, a full-service certified public accounting firm, with emphasis on tax preparation, audits of governmental, educational, and non-profit entities, retirement planning, estate planning, business valuations, litigation support, and banking. He is a Certified Public Accountant in Maryland and Virginia. Tim is also a CERTIFIED FINANCIAL PLANNER professional, Personal Financial Specialist, Accredited Estate Planner, Certified Valuation Analyst, and Investment Adviser Representative.

MURPHY & MURPHY, CPA, LLC.
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