Knowing Your Small Business Year-End Reporting Obligations

It is not uncommon for small businesses to put aspects of their accounting on the backburner, until the end of the year rears its head. At this time, businesses begin to feel the squeeze for having – all their financial papers and bookkeeping in order. On top of all that, as an employer, you also have the responsibility for preparing and distributing required federal forms such as W-2 and 1095s for wage and health care reporting respectively.

Before you panic, let’s review the list of required reporting, forms and documents and prioritize them by deadlines.

Remember that there are two parts to providing employees or independent contractors with data required to complete their individual tax returns – the employee reporting and employer required reporting to the IRS.

January 31:

  • W-2 – Form W-2 provides employees with a summarization of all their payroll wages, earnings, pre-ad post-tax healthcare, cafeteria plans, retirement accounts, loans, or other legally required payments.
  • W3 – is the summary document that must be filed to the IRS to report the total number of W-2 forms distributed to employees.
  • 1099-MISC – Form 1099-MISC provides earnings information to independent contractors who are not ’employees’ of an organization, but have been paid to perform work.
  • 1096- summary document that must be filed to the IRS.
  • 1095-C – If the business is an Applicable Large Employer (ALE) with more than 50 full time employees, the Form 1095 must be provided to employees to provide information on the business’s health care offer of minimal essential coverage (MEC) and affordability.
  • 941, 943, 940 –
    • Form 941 – an employer’s way of reporting IRS withholdings taken from an employee’s pay.
    • Form 943 – This form works the same as the Form 941 except it is used for agricultural employers.
    • Form 940 – Annual Federal Unemployment Tax Return – This form is coupled with an employer’s last quarterly FUTA payment and outlines how much of the tax was paid each quarter.

Februrary 28:

  • 1095-C and 1094 . If you are paper filing these forms, you have until this date to send them to the IRS. If you are efiling, you have until April 1.

March 15 :

  • 1120S and1065 – These are forms a company must file for reporting S Corporation and Partnership taxes.

April 15 (or date specific to a company’s tax year):

  • 1120 – These are forms a company must file for reporting C Corporation taxes, due 3 1/2 months after their fiscal yearend.

Why You Should Hire a Small Business Accountant Rather Than Go It Alone

While waiting until the last minute to get yourself organized and informed about your small business taxes is not recommended, choosing professional tax preparation services can help you get on track and stay there. Organization is the key element to making your tax preparation and filing a smooth process. If organization of receipts and financial papers is not your strong suit, hiring a bookkeeper or accountant can do you good as they will solely focus on this essential small business record keeping.

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Copyright 2018 by Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire.


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