As a business owner, staying on top of tax deadlines is critical to ensuring smooth operations and avoiding costly penalties. One of the most important dates for employers is January 31st. On this day, businesses face multiple filing obligations, including payroll tax forms, W-2s, and 1099s. This article provides a detailed overview of these requirements and the actions you must take to comply with IRS and SSA regulations.
1-Quarterly Payroll Filings: Form 941
If your business paid wages subject to employment taxes during the last quarter of the previous calendar year, you are required to file Form 941, the Employer’s Quarterly Federal Tax Return. This form reports the wages you paid, the taxes withheld, and your portion of Social Security and Medicare taxes.
- Filing Deadline: Form 941 is due by the last day of the month that follows the end of each quarter. For the fourth quarter, which ends on December 31st, the due date for Form 941 is January 31st. However, if you deposited all required payroll taxes on time, you have an additional 10 calendar days to file the form, meaning the extended deadline is February 10th.
- What to Include: Form 941 should report the wages paid in the quarter, the taxes withheld (federal income tax, Social Security, and Medicare), and any adjustments made for prior quarters. This filing ensures that the IRS receives accurate information about your business’s employment tax obligations.
- Publication 15: The IRS Publication 15 (Circular E) Employer’s Tax Guide provides detailed instructions on how to complete Form 941. It’s important to read and follow this guide to avoid errors that could result in fines or other issues.
2-Annual Filing: W-2s and Form W-3
Another critical January 31st deadline is the submission of Form W-2 to report wages and employment taxes for your employees. As an employer, you must provide each employee with a Form W-2 by January 31st, showing their total earnings and the amount of tax withheld during the previous year.
- Deadline to Provide to Employees: Employers must furnish Form W-2 to employees by January 31st. The form details the employee’s earnings, Social Security contributions, Medicare contributions, and any federal, state, or local taxes withheld throughout the previous year.
- Filing with SSA: In addition to giving W-2 forms to your employees, you must submit them to the Social Security Administration (SSA) along with Form W-3, the Transmittal of Wage and Tax Statements. Form W-3 is a summary form that accompanies the W-2s when they are sent to the SSA, confirming the total wages and taxes withheld for all employees.
- Failure to Comply: Failure to file these forms on time or to provide them to employees by the deadline can result in substantial penalties. Make sure you meet this deadline to avoid IRS scrutiny and potential fines.
- SSA Filing Instructions: The SSA provides detailed instructions for W-2 filing. You can find more information on the SSA website, including how to file W-2s electronically and important specifications regarding the format and submission process.
3-Federal Unemployment Tax Act (FUTA): Form 940
Employers who paid wages subject to FUTA tax are required to file Form 940 with the IRS by January 31st. This form reports your business’s liability for federal unemployment taxes, which fund state unemployment compensation programs.
- Filing Deadline: The deadline for filing Form 940 is January 31st. If you have timely deposited all required FUTA taxes, you have an additional 10 calendar days to file, extending the deadline to February 10th.
- What to Report: Form 940 tracks taxable FUTA wages, the amount of FUTA tax owed, and any adjustments. Employers must pay FUTA tax if they paid $1,500 or more in wages to employees in any calendar quarter of the previous year or if they had one or more employees for at least part of a day during 20 or more different weeks in the previous year.
- FUTA Deposit Compliance: Ensure you have made all required FUTA tax deposits by the due dates throughout the year. If you missed any payments or made late deposits, you may be subject to penalties and interest.
4-Form 943: Reporting Wages for Farmworkers
If your business employs farmworkers, you must file Form 943 to report wages paid to those employees. This form is specifically used to report agricultural wages, which are not reported on Form 941 or Form 944.
- Filing Deadline: Form 943 must also be filed by January 31st to report wages paid to farmworkers during the previous year. If you have timely deposited all taxes due, you get an additional 10 calendar days to file.
- Differences Between 941 and 943: Unlike Form 941, which is for general employment tax reporting, Form 943 focuses solely on agricultural wages. Be sure to use the correct form, as using Form 941 or Form 944 could result in errors and potential penalties.
5-Form 944: Small Employer Filing
Form 944 is an alternative to Form 941 for small employers. The IRS may notify certain businesses that they must file Form 944 instead of Form 941 if their annual payroll tax liability is less than $1,000.
- Filing Deadline: Like Form 941, Form 944 is due on January 31st. However, businesses that have timely deposited all required payroll taxes may receive an extension of 10 additional calendar days to file.
- Changing Your Filing Status: If you wish to change your filing status from Form 944 to Form 941 (or vice versa), you can request this change by following the instructions in the Form 944 guide. However, make sure you receive written confirmation from the IRS before you begin filing with a new form.
6-Form 1099-NEC: Reporting Non-Employee Compensation
If your business made payments of $600 or more to independent contractors or other non-employees during the previous year, you are required to file Form 1099-NEC, Non-Employee Compensation.
- Filing Deadline: Form 1099-NEC must be filed with the IRS and given to the recipients by January 31st. This form reports payments made to independent contractors, freelancers, or other non-employees who provided services to your business.
- Form 1096: If you file paper forms, you must submit Form 1099-NEC along with Form 1096, the Annual Summary and Transmittal of U.S. Information Returns. Form 1096 summarizes all of your 1099 filings for the year and accompanies the forms when you submit them to the IRS.
- What to Report: Form 1099-NEC reports payments made in the course of your trade or business for services rendered by someone who is not your employee. It also covers specific types of payments, such as attorney fees or cash payments for fish. Payments made to employees are reported on Form W-2, not 1099-NEC.
7-Form 945: Reporting Nonpayroll Income Tax Withholding
If your business withheld federal income tax from nonpayroll payments (such as interest, dividends, or other payments), you must file Form 945, the Annual Return of Withheld Federal Income Tax.
- Filing Deadline: Form 945 is also due by January 31st. As with the other forms, if you have timely deposited all withheld income taxes, you get an additional 10 calendar days to file.
Final Thoughts
January 31st is a critical deadline for employers to comply with payroll, W-2, and 1099 filing requirements. Failure to file these forms on time can result in significant penalties, which can be avoided with proper planning and organization. Be sure to gather all necessary information well before the deadline and work with your accountant or payroll provider to ensure everything is filed accurately and on time.
By staying on top of these deadlines, you can help your business maintain compliance, avoid unnecessary penalties, and keep operations running smoothly as you enter the new year. Call today for our team to assist you — (239) 939-2233