The Important Month of January

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Once the independent contractors have been sorted out from the employees , it is important to remember that January is an important month for mailing out tax forms. Who gets what and by when?

• Independent Contractors ” IRS Form 1099 ( Miscellaneous Income ). An independent contractor should receive a Form 1099 if you have paid that individual at least $600 last year. Additionally, you will have to send out a Form 1099 to anyone who was paid over $600 in royalties, rent, prizes, or broker exchange transactions. Independent contractors should have their 1099s from you no later than January 31.

• Employees ” An employee should receive IRS Form W-2 ( Wage and Tax Statement ). The W-2 form lists how much money the individual was paid and the amount of FICA, federal, and state taxes you withheld. Like the independent contractors, employees should have their W-2s no later than January 31. Form W-3 summarizes all W-2s prepared by the employer.

• IRS ” The IRS will need Form 1096 as a cover page summary for all your Form 1099s.

• Social Security Administration ” Remember to send them a copy of all your employees' W-2 forms.

• Finally, don't forget ” Don't forget individual quarterly returns (i.e., Form 941 and state), as well as Form 940 for Unemployment Taxes

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