By Denise Felber
The trade bill recently signed by President Obama included a revenue raiser that could affect every business. Effective for any information returns filed after December 31, 2015, the penalty for incorrect forms or missing forms has increased. “Information returns” include Forms 1098, Form W-2 and all of the Forms 1099. The penalties apply to filings with the IRS and forms provided to recipients. Late or corrected forms filed:
|Within 30 days of the due date||the penalty (per form) increased from $30 to $50|
By August 1
|the penalty increased from $50 to $100 per form|
|the penalty increased from $100 to $250 per form|
The projected revenue to be generated by these increases is $59 million in the first 5 years.
We are half way through the year. January always brings long hours and reporting headaches. You might consider reviewing your vendor, customer and employee records for accurate identification numbers and addresses in the next few months. To save research time, you should obtain a Form W-9 from every independent contractor before you pay for services.
In addition to the informational reporting requirements discussed above, the Affordable Care Act has added additional reporting for employers and insurance providers. The deadlines for those forms are same as the information forms. The information requested is voluminous. You should also be planning for the filing Forms 1095 and 1094 (Health Insurance Coverage). It is never too early to plan.