Tax season is just around the corner, and for many businesses, it means filing various forms, including Forms 1099-NEC, 1099-MISC, and more.
Staying on top of these tax deadlines is crucial to avoid penalties and ensure compliance with IRS regulations. This can be a daunting time for SMBs, and staying informed is the first step to staying compliant. In this article, we’ll go into the various tax deadlines that you have to be aware of as 2023 comes to a close.
Stay On Top Of These Tax Deadlines Before 2023 Ends
1. Form 1099-NEC
Form 1099-NEC replaced Form 1099-MISC for reporting non-employee compensation in 2020. If your business paid at least $600 in non-employee compensation in 2023, you must issue this form to the recipients and file it with the IRS. The deadline for providing Form 1099-NEC to payees and the IRS is January 31, 2024. However, if your company has experienced a catastrophic event, you may be eligible for an extension by filing Form 8809.
2. Form 1099-MISC
Form 1099-MISC is one of the most common IRS 1099 forms and is used to report miscellaneous income payments. If your business made payments of at least $600 (or $10 in royalty payments) to a payee in 2023, you are required to provide them with Form 1099-MISC by January 31, 2024. The IRS electronic filing deadline for Form 1099-MISC is April 1, 2024, unless you file a 30-day extension with Form 8809.
It’s important to note that some states may have earlier deadlines for 1099 reporting, so be sure to check the specific requirements for each state you operate in.
3. Form 1099-K
Form 1099-K is used to report payment cards, P2P (peer-to-peer) payments, and third-party network transactions. If your business received gross payment transactions of more than $600 in 2023 through payment card networks like PayPal, Venmo, or online marketplaces, you are required to file Form 1099-K. The deadlines for Form 1099-K mirror those of Form 1099-MISC.
Even states like Florida and Tennessee, which do not tax income, require 1099-K income reporting. Therefore, it’s crucial to include this form in your year-end tax preparations if applicable.
4. Form 1042-S
Form 1042-S is used to report foreign persons’ U.S. source income subject to withholding. This form covers a wide range of payments, including wages, compensation, interest, dividends, royalties, rent, scholarships, and fellowships made to non-U.S. individuals or entities. Form 1042-S must be filed with the IRS and provided to the payees by March 15, 2024. Filing Form 8809 can extend the deadline to April 30, 2024.
It’s worth mentioning that if you have met the 10-form threshold with other forms like 1099s, W-2s, or Forms 1095 for the Affordable Care Act, you will also need to electronically file Form 1042-S. However, it’s important to note that Form 1042-S cannot be filed through the Filing Information Returns Electronically (FIRE) system or the Information Returns Intake System (IRIS) online portal. Instead, it must be filed through the IRS Modernized e-File system.
Penalties for Missing Tax Deadlines or Late Filing
Failing to meet the deadlines can result in steep penalties imposed by the IRS. The amount of the penalty varies depending on how long past the deadline the form is issued. For tax year 2023, the penalty ranges from $60 to $310 per form. If a business intentionally disregards the requirement to provide a correct form, the minimum penalty is $630 per form or 10% of the income reported on the form, with no maximum.
It’s crucial to ensure that you issue these forms on time to avoid unnecessary penalties. Keeping your bookkeeping in order throughout the year and requesting updated Form W-9s from contractors can help streamline the process and ensure accurate reporting. Take a look at our resources page for more tax deadline information.
Staying Compliant and Meeting Tax Deadlines with eFile360
Filing tax forms can be a complex and time-consuming process, especially when dealing with multiple forms and tax deadlines. This is where eFile360 can help. With our experience and expertise, businesses can simplify the process of e-filing 1099 forms and ensure accurate and timely submission.
Get ahead of tax season before it overwhelms you. Let eFile360 handle your 1099 form filing needs and provide you with peace of mind. Sign up for a free account online.