W-2 Forms, 1099 Forms, and Year-End Practices and Procedures 

 

Form W-2 and the 1099 series of forms are called information returns.  Withheld income and FICA taxes are reconciled quarterly when you file your Form 941 with the IRS.  They're reconciled again, annually, when you file a Form W-2 for each employee with the Social Security Administration (SSA).  Paper Forms W-2 and a transmittal form, Form W-3, must be filed by February 28.  Employers filing 250 or more forms must file electronically by March 31.  By January 31, employees must be provided with copies of their W-2 forms.  Corrections to W-2s are made on Form W-2c.  Independent contractors to whom you've paid at least $600 must receive Form 1099-MISC by January 31.  Paper 1099-MISC forms are due to the IRS by the last business day in February.  Employers filing 250 or more forms must file electronically by March 31.  Continue information reporting. 

 

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FAQs

1. An employee is also on the company's the board of directors.  How do we report her director's fees — on a separate 1099-MISC form, or combine the fees with her wages on her W-2 form?  
   
   

2. An employee got married, but never updated her Social Security card to reflect her married name.  We review all W-2s prior to distributing them, and saw that her W-2 is in her maiden name.  We told her about this and suggested that she apply for a new Social Security card, but she insists that her W-2 carries her married name.  Who's correct? 
   
   

3. A couple of months ago, the business reorganized.  We received a new Employer Identification Number (EIN) in the process.  Which EIN — the old one, new one, or both — must be included on employees' W-2s?
   
   

4. Our top salesperson just won a vendor-paid trip for two to the Superbowl.  Is the value of the tickets (plus hotel, meals, etc.) taxable, and if so, who's responsible for what?

5. Must we provide a Form 1099-MISC to a service provider if the designation on the letterhead is LLC? 
   
   

6. Throughout the year, repairs were made to office equipment.  The itemized bills show that $550 went to labor and $675 on parts.  I know that this repair firm isn't a corporation.  Is 1099-MISC reporting necessary, since the labor was less than $600?
   
   

7. A new hire informed me that the SSA hasn't yet issued her a new Social Security card with her married name.  How do I handle this on her W-2?
   
   

8. We'll be filing our W-2s with the SSA electronically; employees will still receive paper forms.  After preparing employees' paper forms, what happens to Copy A of those forms?
   
   

9. What do we do with an employee who consistently refuses to provide us with a correct SSN?  
   
   

10. A friend of the company's president has his own computer business.  He was here for a few days upgrading our server.  I found our invoice listing him personally as the payee, but the check was made out to his corporation.  Do we report this on a 1099-MISC form?    

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