As 2016 draws to a close, the last thing you probably want to think about is tax season. But if you are an employer or small-business owner, you need to get on the tax ball sooner rather than later due to a new IRS deadline for the 2016 tax year.
A new law was enacted in December of 2015: the Protecting Americans from Tax Hikes (PATH) Act. This law created a new filing deadline for employers and business owners to submit Forms W-2 to the Social Security Administration (SSA). This change also affects certain Forms 1099-MISC reporting non-employee earnings such as payments to independent contractors.
For the 2016 tax year, the new deadline for these forms is January 31st, 2017. In prior years, the deadline was at the end of February if filing on paper and the end of March if filing electronically, so if this applies to you, you need to get your documents in order and in the hands of the SSA as soon as the new year begins.
PATH is designed to help the IRS detect fraud as well as send out refunds more efficiently. By obtaining employer data sooner, the IRS will be able to match up Forms W-2 with tax returns, therefore verifying amounts and details.
Unlike in the past, extensions will not be granted automatically. If the SSA deems your extension request as valid, you will be allowed one 30-day extension. If you require an extension, you will need to file Form 8809, “Application for Extension of Time to File Information Returns” before January 31st, 2017.
There has been no change to the January 31st deadline for employers to release W-2 or 1099 forms to their employees.
The beginning of a new year marks the start of tax preparation for many of us. Don’t leave paperwork until the last minute and be caught scrambling. Call me today at 858.756.0004 or email [email protected] if you have any questions or need guidance on managing your finances and preparing for tax season.
About Deb Sims
Deborah Sims is the Principal of Estate Management Group, a wealth management and financial services firm offering comprehensive and customized strategies to help her clients manage their assets and feel confident in their future. Her mission is to serve as her clients’ most trusted wealth advisor through professional knowledge, integrity, and personalized wealth management services. Based in San Diego, California, Deb’s team has offices in Rancho Santa Fe, Old Town, and Del Mar. She invites you to contact her team today to learn more about how they can help you.