23 Jan Preparing for the 2020 Tax Season
With 2019 in the rearview mirror, many employees are anxious to receive their W-2s and begin preparing to file for taxes. From understanding W-2s to implementing the new federal W-4 forms, the changes to tax documents and processes will affect businesses of all sizes. Whether you have a small business payroll or simply want to learn more about a printable W-2 or payroll tax, it is in your best interest to stay on top of all payroll services and processes.
Here’s what you need to know:
The deadline for filing your W-2 is January 31 each year. If you miss this deadline, you will be subject to late fees and penalties up to $550 per delayed or missing paperwork. However, if January 31 is a Saturday, Sunday, or national holiday, the due date changes to the next business day.
Avoid the last-minute filing crises by providing W-2s to employees as soon as possible. This way, if errors are identified, they can be corrected prior to filing. Another suggestion is to double-check the classification of your workers. If you’re not sure how to classify your workers, it is recommended to consult an employment attorney or similarly licensed professional.
An employee’s W-2 can be printed via payroll and/or tax preparation software, a company accountant, major office supply stores, or directly from the IRS. The Social Security Administration also offers online W-2 processing and printing tools. It is critical to prepare for reprint forms and associated costs. To help mitigate some of these costs, we recommend offering online printable W-2s with physical copies of W-2s to ensure accessibility and timely distribution of such form to employees.
The W-4 form is known as the Employee’s Withholding Allowance Certificate and is completed by employees to determine tax withholdings. While the W-4 form is not filed with the IRS, it is imperative to securely file the forms and remain up to date on any changes that may occur.
As of January 1, 2020, there was a federal redesign of the W-4 form. The redesign was to provide simpler, straightforward wording for employees to fill out. Some FAQs are listed below.
Question: Why were withholding allowances removed from the new form?
Answer: Because tax laws have changed, an employee cannot claim personal or dependency exemptions and as a result, are no longer provided allowances.
Question: Do all employees need to fill out a new form?
Answer: Current employees are not required to fill out a new W-4. However, new employees expected to receive their first paycheck in 2020 and current employees who wish to make changes to their current withholdings will need to fill out a new W-4.
Note: For employees who do not provide a completed W-4, employers are to report them as single with no dependents. This is also applicable for rehires who do not produce new W-4s.
For more information on the new federal W-4 form, please visit the IRS website.
Payroll services and payroll taxes are not simple tasks. However, when managed correctly, payroll and taxes can be a straightforward process. Investing in HR services and payroll services can provide the support you need to ensure you have all proper forms filled out and file them correctly. VensureHR, your PEO payroll provider, offers online payroll options and payroll services tools and software customized to your business needs. Contact us today to see how we can provide payroll tax information and assist in creating a simpler process for W-2s and other tax issues.