The hectic 1099 season is fast approaching, and 2020 filing deadlines will be here before your finance team knows it.
So familiarizing A/P with this year’s timeline and other key details can get them prepped early on. Here’s what to know:
This year, during the pandemic, many companies increased remote work and turned to more digital processes. That will likely be reflected in e-filing popularity. Even those that stuck with paper in the past may take advantage of IRS’s Filing Information Returns Electronically (FIRE) System now.
Plus, remember there will be a lower mandatory e-filing threshold beginning in Tax Year 2021. So it’d be smart for A/P to get more familiar with the system this go-round, considering they may have to use it next year.
For e-filing, your team should review the schedule for the FIRE Test System (to verify returns are good to go before actual filing starts) and the FIRE Production System. This year, the system’s schedule is as follows:
- Nov. 3-Dec. 4, 2020: FIRE Test System available.
- Dec. 4, 2020-Jan. 4, 2021: FIRE Test System down for updates.
- Dec. 4, 2020-Jan. 5, 2021: FIRE Production System down for updates.
- Jan. 4, 2021: FIRE Test System available for test submission.
- Jan. 6-8, 2021: FIRE Production System controlled launch.
- Jan. 8, 2021: FIRE Production System available for file submission.
Take note: According to IRS, the two systems don’t connect. So your team will need to create separate accounts for the test system and the production system.
Ready to file? The most important IRS deadlines for your team to know include:
- Feb. 1, 2021: 1099-NECs, whether paper or electronic, due.
- March 1, 2020: other paper 1099s, including 1099-MISCs, due.
- March 31, 2020: other electronic 1099s, including 1099-MISCs, due.
Check out the 2020 Instructions for Forms 1099-MISC and 1099-NEC for more info on federal filing.
Of course, state filing is a bit trickier, since states all have their own requirements for information returns. So your team should check your state’s stance to see if they have any extra filing responsibilities to pencil into their year-end calendar.
Need more information?
Premier Learning Solutions is offering a workshop, Form 1099 Reporting Requirements: What Employers Need to Know for Timely, Compliant Filing, available on-demand.
Some of the topics it covers include:
- What’s changed on Forms 1099 for 2020
- The latest reporting requirements to stay timely and compliant
- Keys to avoid penalty notices and increased costs for noncompliance
- A step-by-step review of Form 1099 reporting mechanics
The speaker is Mark Schwartz, who has over 15 years of experience in state and federal payroll tax audits, collections and payroll consulting. As an auditor, he prided himself on his ability to educate his auditees on state and federal payroll tax requirements. Mark now focuses on helping organizations prepare for payroll tax audits – whether they’ve already gotten a notice or are still hoping they don’t.
Click here for registration and more information.