It’s known far and wide that accountants work some of the longest hours from February – April. Unfortunately for many accountants, CPAs and self-filing businesses, it’s time to add January to that list.
Due to the Protecting Americans from Tax Hikes (PATH) Act, the IRS’ effort to detect and prevent refund fraud, wage and information reporting deadlines have become extremely compressed, with W-2, most 1099 and 1095 (ACA) deadlines all falling on January 31. The reason for the condensed deadlines is simple. According to the IRS, “Having these W-2s and 1099s earlier will make it easier…to verify the legitimacy of tax returns and properly issue refunds to taxpayers eligible to receive them.”
January 31, 2019 Federal and Recipient Filing Deadlines:
|Form Type||Format||Send To|
|W-2||Paper, E-File||SSA & Recipient|
|1099-MISC (box 7)||Paper, E-File||IRS & Recipient|
But it’s not just federal deadlines that have moved to January 31 recently. States have followed suit. In fact, most states have historically had later filing deadlines, extending to the end of February or March. These states are now overwhelmingly trending towards mimicking the earlier federal deadlines. Last year the following states had filing deadlines on January 31, with more expected to join them in 2018:
|District of Columbia||Minnesota||Utah|
To recap, there are three form types, two filing methods, to three different audiences all due before the end of January. Add all of this up and accountants, CPAs and self-filing businesses are in for a busy January. Adding to the time crunch is the fact that most employee and contractor data is not available until the beginning of January, leaving less than 31 days to complete the work.
Although January is going to be busy, there are ways to get ahead of the work. Greatland, the leader in W-2, 1099 & 1095 filing, recommends these tips to help accountants, CPAs and self-filing businesses survive January:
- TIP #1 – Choose your filing method and purchase your products. You can choose to file by paper or e-file, but if you have 250 or more filings per EIN for the same form type, you are required to e-file. In the end, choose and purchase the product you are most comfortable with, but make that decision and purchase prior to December 15. This will ensure you are ready when the time comes to file.
- TIP #2 – Consider paperless filing. Paperless filing has many advantages that will save loads of time. All-inclusive paperless filing programs, like Yearli.com, make it easy to file to IRS/SSA, applicable state agencies, and get copies to recipients. Yearli.com even has an import feature that allows you to upload data from any source, saving even more time.
- TIP #3 – Prepare your data. Although your data may not be finalized until the end of the year, take some time to make sure you have the correct, EINs, SSNs, TINs, employee and dependent information, etc. Doing this before the end of the year could save you days of agony in January. This minor detail could also mean the difference between meeting the deadline or not, as well as facing a heavy IRS fine.
- TIP #4 – Don’t bank on the IRS extending the 1095 (ACA) filing deadline this year. Although the IRS has extended deadlines each of the first three years, experts suggest last year was probably the last. According to 1095 filing expert Janice Krueger, “Don’t expect the IRS to extend the ACA filing deadline this year just because they have in the past. Be prepared to file your forms before the January 31 recipient deadline.”
The new reality is that January is expected to be busy for anyone taxed with the responsibility of filing W-2, 1099 or 1095 forms. By following the tips above, filers can get ahead of the January filing time crunch!