Single Form Mistake Becomes $1500 Fine!

28 September 2017
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Employers can experience an even more stressful tax season than most individual tax filers, especially with a single form mistake.

This is due to tax forms that they must submit for their employees.

Employers, beginning in the 2016 tax year, are required to submit Form W-2s to the IRS by January 31st instead of the previous deadline of February 28th.

The IRS has enacted this change in order to decrease identity theft in relation to stolen W-2s.

However, this also decreases the amount of time employers can gather these documents and submit them to the IRS.

It is important to be aware of these deadlines so you won’t be penalized for a single form mistake!  

Employers can be penalized in two ways:

  • Failure to file –  this includes a late filing, errors or omissions on one or more W-2, or filing paper forms when they should be filed electronically.
  • Failure to furnish – this includes W-2s that employers must send to employees after January 31st, or errors or omissions on employees’ W-2s.

Single Form Mistake of Sad Person

These are the penalties that could be imposed for Failure to File or Failure to Furnish:

  • $50 per W-2 if filed within 30 days of due date
  • $60 per form if filed between 30 days of due date and August 1 with a maximum fine of $500 ($200 for small businesses)
  • $100 per W-2 if not filed by August 1($500/year for small business; $1,500 annually for others)

Exceptions will be considered if they fall under these circumstances:

  • Failure to File/Furnish due to reasonable cause
  • If a corrected W-2 is provided by August 1st (the original must have been provided within the deadline).

Employers should ensure that they are not waiting on any employees to submit their forms. They should diligently keep track of each form that will need to be submitted, then mail the forms to the IRS by January 31st.

When April 2018 rolls around, you will feel much more prepared to file your taxes with ease and less stress. Feel free to email us or message us if you have any other tax preparation tips or ideas!

Written By: Nushin Zarrabi 

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