As the year winds down, it’s time for businesses to start preparing for their tax filings. January 31 is the due date for many significant tasks, as shown below.
Businesses should keep in mind that state taxing authorities have their own set of due dates. Also, the IRS will grant extensions because of serious weather-related incidents, for example. It’s never too early to work with your accounting and payroll staff to make sure your end-of-year reporting is accurate and on time.
January 31 Requirements
- File Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. However, if you deposited all of the FUTA tax when due, you have 10 additional calendar days to file.
- File Form 945, Annual Return of Withheld Federal Income Tax, to report any nonpayroll income tax withheld in the previous year. If you deposited all taxes when due, you have 10 additional calendar days to file.
- File Copy A of all paper Forms W-2, Wage and Tax Statement, with Form W-3, Transmittal of Wage and Tax Statements, or file electronic Forms W-2, with the Social Security Administration (SSA) to report wages, tips and other compensation paid to an employee. For information on reporting Form W-2 information to the SSA electronically, visit the SSA Employer W-2 Filing Instructions & Information Web page.
- File Copy A of paper, Form 1099-NEC, Non-Employee Compensation, with Form 1096, Annual Summary or file electronic Forms 1099-NEC with the IRS. Don’t forget to file Form 1099-MISC for Miscellaneous Information which is due in February or March if electronically filing.
Other end-of-year reminders
There are other key issues you need to be on top off as the year ends:
- You must report the amount of personal use of company-owned vehicles as compensation on employees’ W-2 forms. There is a standard formula used to calculate these amounts based on the value of the vehicle and the percentage of business vs. personal use of the vehicle.
- You must report the amount of company-paid health insurance premiums for S-corporation owners and their families as compensation on the employees’ W-2 forms. This amount is not subject to Social Security and Medicare withholding.
- You may have other payroll reporting requirements if you offer other fringe benefits to employees such as disability Insurance, life Insurance, dependent care, education.
This is just an overview. For details on what your company needs to do—for the end of 2021 and for all of 2022, call us. Contact us at 703-218-3600 or click here. To review our business planning articles, click here. To learn more about our business advisory services, click here. To learn more about MCB’s tax practice and our tax experts, click here.
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