As the year winds down, it's time for businesses to start preparing for their tax filings. January 31 is the due date for many significant tasks, as shown below.
Businesses should keep in mind that state taxing authorities have their own set of due dates. Also, the IRS will grant extensions because of serious weather-related incidents, for example. It's never too early to work with your accounting and payroll staff to make sure your end-of-year reporting is accurate and on time.
January 31 Requirements
- File Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return. However, if you deposited all of the FUTA tax when due, you have 10 additional calendar days to file.
- File Form 943, Employer's Annual Federal Tax Return for Agricultural Employees if you paid wages to one or more farm workers and the wages were subject to Social Security and Medicare taxes or federal income tax withholding under the Form 944, Employer’s Annual Federal Tax Return, for the previous calendar year instead of Form 941 if the IRS has notified you in writing to File Form 944.
- File Form 945, Annual Return of Withheld Federal Income Tax, to report any non-payroll income tax withheld in the previous year. If you deposited all taxes when due, you have 10 additional calendar days to file.
- File Copy A of all paper Forms W-2, Wage and Tax Statement, with Form W-3, Transmittal of Wage and Tax Statements, or file electronic Forms W-2, with the Social Security Administration (SSA) to report wages, tips and other compensation paid to an employee. For information on reporting Form W-2 information to the SSA electronically, visit the SSA Employer W-2 Filing Instructions & Information Web page.
- File Copy A of paper Form 1099, Miscellaneous Income, with Form 1096, Annual Summary and Transmittal of U.S. Information Returns, or file electronic Forms 1099, Miscellaneous Income with the IRS, when you are reporting non-employee compensation payments in box 7. Don't forget Form 1099-NEC, required for services performed by someone who is not your employee.
Other end-of-year reminders
There are other key issues you need to be on top of as the year ends:
- You must report the amount of personal use of company-owned vehicles as compensation on employees' W-2 forms. There is a standard formula used to calculate these amounts based on the value of the vehicle and the percentage of business vs. personal use of the vehicle.
- You must report the amount of company-paid health insurance premiums for S-corporation owners and their families as compensation on the employees' W-2 forms. This amount is not subject to Social Security and Medicare withholding.
- You may have other payroll reporting requirements if you offer other fringe benefits to employees such as disability insurance, life insurance, dependent care, or education.
This is just an overview. Contact your R&A advisor for details on what your company needs to do—for the end of 2021 and for all of 2022.
About this Author
Nate is a trusted advisor for businesses and individuals, providing tax planning, compliance support, and accounting services. He also is certified as a Personal Financial Specialist which allows him to guide clients through the many challenges and phases of their career from start-up to retirement.