It happens every year, but somehow small business owners are always surprised; it’s that thing called tax season. No one likes it but everyone must do it. How can your company best prepare for it now?
On the Small Business Radio Show this week, Jaime Lizotte, the HR & Tax Compliance Solutions Manager at ComplyRight discusses what every small business owner needs to do right now to prepare for the 2019 tax season.
Prepare for the 2019 Tax Season
Unfortunately, too many companies wait for the last minute since Jaime believes that they are too busy growing their business. She explains that a company’s obligation to the government is just not filing quarterly or annual tax returns, but other informational returns. Jaime says this includes reporting employee earnings on W2s and contractor payments on 1099s. Both of these need to be done by January 31. This is important so those team members can file their own tax returns by April 15. It is not uncommon for the small business owners to miss this deadline. Services like efile4biz can do this for the company automatically and online.
With W2s, using a payroll service will make sure the wages are correct. Jaime reminds owners that they need to have the correct address and social security numbers for each employee. For contractors, companies must have the total of all payments made to them, plus their tax identification number. Jaime says this information should be on a W9 they provide to you before they start working.
What if the contractor or employee disagrees with how much you reported on the 1099 or W2 to the IRS? The company may receive a penalty per form if they do a revised filing after the deadline. For 2020, Jaime points out there are no automatic extensions to any of these deadline dates.
Listen to the entire interview on the Small Business Radio Show.
Thanks for the reminder. It is important for businesses to get ready before the new year.