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Thursday, January 24, 2019

What You Need to Know About The W-2 and 1099 Tax Form Deadline!

January 31st is right around the corner! You have to make sure your 2018 W-2 and 1099-MISC Forms are ready to file by the IRS deadline.

If your trucking business has employees, you will need to report their wages and tax withheld on IRS Form W-2. Operators using freelance or contracted workers must report all payments using IRS Form 1099-MISC. Many trucking companies get confused about the difference between the W-2 Form and 1099 Tax form. Knowing these differences is critical for trucking business owners. Any mistakes you make could result in IRS fines and extra work for you.

IRS Form 1099 MISC - What You Need to Know

The IRS Form 1099-MISC is used to report miscellaneous payments made during the calendar year. You'll need to use it for individuals who are not considered employees, such as an independent contractor or subcontractors.

You will need to file Form 1099-MISC if any of the following applies. Note there are also certain incomes you must report as well.

• $600 or more in services, lodging, and other income expenses.
• Each worker you’ve withheld federal income tax from under the backup withholding rules.
• Paid $10 or more in royalties or broker payments instead of tax-exempt interest dividends.
• All gross proceeds to attorneys and other legal consultants.
• Any direct sales of consumer products resulting in an income of $5,000 or more made anywhere that isn’t a permanent retail establishment.

Expenses NOT reported on IRS Form 1099-MISC include:

• All non-reportable payments made to corporations, excluding attorneys and legal consultants. They must receive a Form 1099 - MISC regardless of their corporate status.
• Payments made to foreign governments or tax-exempt organizations in the United States, the District of Columbia, and U.S. possessions.
• Income paid to official employees (This is where the From W-2 comes in).

IRS Form W-2 - What You Need to Know

First of all, what is a W-2? IRS Form W-2 is an annual statement that you must file with the SSA and issue recipient copies to employees. You, the employer, will then use these to report salaries and other payments made during the previous tax year. You will also need to file Form W-2 for each official employee with the SSA (Social Security Administration). This is very important considering your employees use this form to file their personal tax returns. On their recipient copies they will find wages earned, taxes withheld, and additional information needed to complete their yearly tax returns.

Filing late or not filing at all can cost you and your business big time. If you don’t file Form W-2s by the deadline, you must pay a $30 fine for each. After 30 days, this penalty raises to $60 per form with a top fine of $500. That’s in addition to the pressure you will receive from your employees and contractors when they can’t file for their refunds.

If you do make a mistake, you can use a W-2 Correction Form W-2c. It would be best if you did this as soon as you discover a form error. You also need to send copies of your corrected W-2 Forms to each employee.

TaxBandits Can Help Your Trucking Business

Tax season isn’t fun for anyone, but it's even less fun to handle all alone. We specialize in filing 2290s, but our sister product TaxBandits is here for the rest of your trucking company’s tax filing needs!

With a step-by-step interview-style filing process and 100% US-based support, TaxBandits can help you file your IRS Form W-2 or IRS Form 1099 in a matter of moments. They even have print mailing options available to guarantee your recipient copies are received on time. Sign up for your free account today and only pay when you transmit!


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