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Mistakes to Avoid on 1099s

More Americans today are performing contract work either on a full-time or part-time basis. If you were an independent contractor in 2017, then it’s your responsibility to track that income individually. This is where 1099 forms come into play. Unfortunately, there are a number of mistakes contractors make with 1099 income. Keep reading as we dive into the five most common ones and how you can avoid being audited by the Internal Revenue Service.

Misunderstanding the form altogether – There are several different 1099 forms, from 1099-MISC and 1099-INT to 1099-DIV and 1099-R. Each has specific tax reporting requirements. Take 1099-INT, for example. This is an IRS tax form that’s used to report interest income paid to individuals. Essentially, 1099-INT reports the total amount paid by the financial institution to an individual during the course of a year. Contractors often ask, “Well I never got a paper form, so I don’t have to do anything, right?” Not true. It’s imperative that you self-report the income on your taxes in this case. Those who fail to do so could be subject to an audit, which could result in paying back taxes plus costly interest and penalties. Our best piece of advice here is to make sure you educate yourself on 1099 forms and what they entail.
Not writing off all business expenses – Are you looking to save money as a contractor? Then writing off all business expenses is a must. Let’s look at a hypothetical to provide some clarity for this. You work primarily from home and rarely venture outside of your residence for business matters. On occasion, though, you must commute to client offices. That mileage qualifies as a business expense. So be sure to account for that during tax season. The last thing you want is to overpay hundreds or thousands of dollars in taxes.
Not keeping adequate records – The IRS requires you to keep proof of all business receipts, mileage, and other documentation to prove that the transactions actually happened. Should you be unable to provide this information for whatever reason, you may be on the hook for back taxes and penalties.
Writing off personal expenses – Plenty of independent contractors and self-employed folks use the same phone for personal and business use. The same goes for contractors and vehicles. Obviously, the IRS won’t be happy if you choose to write off both personal and business expenses. So you must estimate what percentage of the cost is related to personal versus business use. It may seem like an inconvenience at first, but it’s certainly better than the alternative.
Counting expenses more than once – In the QuickBooks Resource Center, it’s explained that most people use the Standard Mileage Rate when figuring out car expenses to write off. Be aware that the Standard Mileage Rate includes things such as gas, repairs, maintenance, lease payments, insurance, depreciation, and registration. As aforementioned, avoid counting the expense a second time with personal transactions.

The Go-To Spot to File 1099 Forms

Now that you know about which mistakes to avoid when filing, it’s time to get started with 1099 preparation. OnlineFileTaxes.com is the easiest way to file your 1099 forms in 2018. Thanks to our services, there’s no need to invest in pricey software that will only be used once a year. Say goodbye to administrative and IT costs associated with year-end processing. What makes OnlineFileTaxes.com so great is that your online files are electronically sent to the IRS for fast, efficient, and simple filing. Our team even prints and mails recipient copies for you to keep for your convenience.

Whether you’re an individual entity or business owner with multiple employees, we can help. OnlineFileTaxes.com can help you effectively manage those 1099 online forms. Maybe you need just one copy of 1099 forms. On the other hand, there’s a chance you might need hundreds. Whatever the case, we have a solution for you. You don’t have to stress about tax season any longer. OnlineFileTaxes.com allows you to get your filing done correctly and efficiently so you can get back to focusing on your business.

E-file 1099 forms today. Sign up for free and enjoy prices as low as $1.25 per form including printing, mailing, and online e-filing services.

How to Handle Your First Business Tax Return

You will always remember 2017 as the year you started your own business. But now tax time has arrived. It’s your responsibility to get those returns filed accurately, timely, and in a way that achieves the maximum refund possible. Of course, you also have a business to run at the same time. Here are a handful of things to consider when filing a business tax return for the first time:

Review the forms in totality – It’s important to do your due diligence in seeing which line items need to be filled out. You will be asked things such as the nature of your business, the year of the business, and of course, its location. Lastly, be sure that your accounts have the correct categories of expenses and income. This will allow you to get off on the right foot in terms of filing those returns properly.
Determine the right depreciation method – As explained by The Balance, the Internal Revenue Service allows a first-year deduction of up to $100,000 for the majority of furniture and equipment, as opposed to writing off the cost over a number of years. It’s your choice, therefore, if you’d like to take the first year write-off. If your business is still relatively young, then it may be best to go with a slower depreciation. This ensures that most of the deductions will be available when your business has more income and is in a higher tax bracket.
Understand home office deductions – Do you have a home-based business? Then it’s important to consider the ability to deduct a portion of your residence as a deduction. To do this right the first time, deduct the percentage of the real estate taxes and mortgage interest that would be otherwise taken as an itemized deduction. If there are any profits remaining, then other home expenses would be allocated to the business and personal portion.
Calculate self-employment tax – Believe it or not, self-employment tax may be a significant part of this process. Make it a point to calculate these taxes as part of your total when paying quarterly estimates. Not to mention, the first quarter installment of your 2018 taxes are also due April 15. It’s crucial that you have these funds readily available.
Get the necessary forms to employees – Remember that your employees receive a printable W-2 form to identify their income and withholding tax. Then there’s the 1099-MISC reporting for contractors who make at least $600 as of the 2017 tax year. If you haven’t done so already, have your contractors complete form W-9 to give you the required information. The more time you allow yourself and your team to do this, the better. The last thing you want is to wait until the last second to get everyone their tax forms.

An Easier Way to File 1099

It wasn’t too long ago that business owners were forced to buy and fill out lengthy tax forms. At OnlineFileTaxes.com, that’s no longer the case. We are proud to be an IRS-approved e-file provider. What does that mean exactly? Well, 1099 preparation has never been easier. Unlike other clunky online tax services, OnlineFileTaxes.com is designed with you in mind. We understand that you may not have a lot of time to mess around with tax forms. That’s okay! We have made the entry and filing of tax data both convenient and economical. Best of all, we guarantee that your information is filed on time with the IRS.

No longer do you have to dread tax season. At OnlineFileTaxes.com, we’ve perfected the e-filing tax process. The information you provide to us is strictly confidential and only to be used for the purpose of filing 1099 forms.

Here are just some of the benefits of using our services:

Allows you to e-file 1099 forms stress-free, whether you need one or hundreds
Eliminates the need to invest in any software
Takes away any administrative and IT costs associated with year-end processing
Prints, mails, and electronically files with the IRS once you fill out the forms

Whether you need just one copy of 1099 forms or other tax forms, we have you covered. Sign up for free today and get started with our services for as low as $1.25 per form.

Debunking Tax Myths About IRS Audits

Few Americans actually enjoy doing their taxes. It’s why so many taxpayers tend to wait until the last possible second to file. Then there’s the fear of the Internal Revenue Service. Unfortunately, the IRS is often portrayed as “out to get us.” Nobody wants to be audited. With that in mind, here are myths about IRS audits that you shouldn’t believe, as referenced from Money.com.

You’re more likely to be audited if you e-file – Thanks to innovative software, gone are the days when you had to spend days (or even weeks) filing your taxes. The fact is that nearly 90 percent of all returns today are submitted electronically. Plus, the IRS confirms that returns done by hand are 20 times more likely to have mistakes on them compared to ones completed online. This means you shouldn’t have to fret over taking the convenient route this tax season.
IRS agents will come to your home – Mistakes occasionally happen when filing online. For whatever reason, things just don’t match up accordingly. As a result, an agent is required to conduct an audit if for no other reason than to get a few items clarified. So should you have to be concerned about an intimidating IRS agent knocking on your door at dinner time? The short answer is ‘no.’ Nearly 70 percent of audits take place by mail. Be aware that scammers are trying to take advantage of taxpayers via email or phone more so than ever before.
Filing late raises the risk of being audited – Do you consider yourself a procrastinator with taxes? Some taxpayers mistakenly think that using an extension to file late increases their chance of getting audited. This just isn’t accurate, though. There are certainly a number of factors that warrant an extra look by the IRS. But the timeframe in which you filed isn’t necessarily one of them.
Audits are a terrible experience – It used to be that the IRS was a frightening agency that took over your house and went through every record imaginable. You can feel comfortable knowing that isn’t the case anymore. Agents are required to focus more on taxpayer rights and customer service. Ultimately, you’re working with the IRS agent to resolve something on your return.
Only the wealthy get audited – There’s no question that the rich have a higher chance of being audited by the IRS. Those who make less than $200,000 in a year get audited 1 percent of the time. Not surprisingly, the more income you report, the greater the chance of being audited. However, just because you may not make six figures doesn’t mean the IRS won’t take a closer look. For example, families earning less than $100,000 a year saw their audit risk go up by 17 percent in the last seven years. Meanwhile, Americans making more than $100,000 per year have seen their audit risk decrease by 8 percent.
More deductions mean more audits – There are plenty of deductions for taxpayers to take advantage of over the course of a year. It’s not as though a long list of deductions will raise a red flag with the IRS. Now, if charitable deductions amount to more than your income, you’re going to be in some trouble.
The audit risk is over after you get your refund – You waited months to get that refund check and it finally arrives. No longer do you have to worry about audited, right? Not exactly. It’s important to know that the IRS can go back up to three years to audit someone, or up to six years if they find a major discrepancy.

File 1099 Forms With Ease

Now that you have clarification on some of the common tax filing myths, it’s time to get to work. OnlineFileTaxes.com is the easiest, most cost-effective way to file 1099 online. Thanks to OnlineFileTaxes.com, 1099 preparation is a breeze. Whether you just need one copy of 1099 forms or hundreds, we are your one-stop shop.

Whether you’re a business owner, CPA, accounting professional, or individual and need to e-file 1099 forms, turn to OnlineFileTaxes.com. Our prices start at just $1.25 per form, including printing, mailing, and e-filing services.

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Tips for Filing 1099-R

Form 1099-R is a U.S. Internal Revenue Service form that’s used to report distributions from pensions, annuities, retirement/profit-sharing plans, IRAs, and insurance contractors for each person to whom you have made a designated distribution or are treated as having made a distribution of $10 or more from profit-sharing or retirement plans. This could also include any individual arrangements, annuities, pensions, insurance contractors, survivor income benefit plans, permanent and total disability payments under life insurance contractors, charitable gift annuities, etc. Keep reading for 1099-R filing tips from OnlineFileTaxes.com.

Your taxable amount may not be fully ‘taxable-focus’ on Box 2a – Usually, your plan administrator must reflect the taxable amount of your distribution in Box 2a. Be aware that the following are non-taxable transactions, which would be reported in Box 1, but not Box 2a:
1. Direct rollovers between qualified plans, 403(b) plans, 457(b) plans, traditional IRAs, and simple IRAs
2. The principal on a return of excess contribution from an IRA that’s removed by the deadline (the excess amount and earnings are reported in Box 1, but only the earnings are reported in Box 2a)
3. Any recharacterized IRA contributions or Roth conversions
4. Distributions of after-tax amounts from qualified plan
You will need to apply the non-taxable treatment on your return if an amount is reported in Box 2a – Let’s look at an example of this. You receive a rollover eligible distribution and you rolled over the amount within two months. The IRS requires that you report such amount on Lines 15a and 15b if the distribution was made from an IRA or Lines 16a and 16b if the distribution was made from a qualified savings plan. Maybe you receive a distribution of $15,000 from your traditional IRA last year, but you rolled over the amount within the allocated 60 days. The issuer of your 1099-R must report the amount as taxable. When you file your return, be sure to do the following:
1. Enter $15,000 on Line 15a
2. Enter ‘rollover’ next to Line 15b
3. Enter ‘0’ on Line 15b
Non-taxable amounts are attributed to after-tax contributions made to your qualified plan – Here’s the thing: If the distributions were made from a qualified plan or 403(b) plan, then there’s a good chance the 1099-R correctly shows the non-taxable amount. Just know that you may have to file Form 8606 with your return in this case. Form 8606 includes a formula that helps you determine the taxable portion of your distribution. Filing this additional form will help the IRS understand how you got to the current figure.
Stay accurate with any recharacterization – Let’s say that you converted an amount that water recharacterized down the road. If a conversion for last year is recharacterized this year, the 1099-R for recharacterization will not be issued until January of next year. Not only that, but the tax reporting for the recharacterization will likely not correspond to the tax reporting for the conversion. Consider the hypothetical in which you converted $200,000 last year and, due to market losses, the account was valued at $150,000 when it was recharacterized. You should expect to receive a 1099-R form and a 5498 showing $150,000 for the recharacterization. Still, you would treat the entire $200,000 as non-taxable because the entire amount was recharacterized for tax purposes. In the event that you characterize less than 100 percent of the conversion, you will need to file IRS Form 8606.

Unless the form shows that you had taxes withheld, it’s not required that a 1099-R be filed with your return. It’s a good idea, however, to keep a copy of your account statement that includes the transaction for which the form was generated. This way, you have what you need should a transaction review come up down the road.

Stress-Free Way to File 1099 Forms

We are proud to make 1099 preparation much more efficient and cost-effective than it’s been in the past. OnlineFileTaxes.com is an IRS-approved e-file provider. Whether you need just one copy of 1099 forms or hundreds, we can help. Our 1099 online forms are available for as low as $1.25 perform.

Here’s how it works: First, use our online tax reporting service to e-file your 1099 forms in minutes. No longer are you forced to spend hours on end filling out forms manually. From there, your online files are electronically sent to the IRS for fast, efficient, and simple filing. We even print and mail recipient copies for you to keep for your records.

With OnlineFileTaxes.com, you don’t have to invest in expensive software that you only use during tax season. Plus, say goodbye to outrageous administrative and IT costs related to year-end 1099 processing.

Have you been searching for a less stressful way to e-file 1099 forms? Look no further than OnlineFileTaxes.com.

Tips for Filing 1099-DIV

You have plenty of tasks on your to-do list as a business owner. From paying employees to keeping customers happy, you will do whatever is necessary to keep things running smoothly. When it comes to taxes, though, you may be anything but an expert. Let’s say you rely on independent contractors for certain projects. If that’s the case, you must send out 1099 forms for tax-filing purposes. Be aware that such forms are only sent to sole proprietorships and partnerships. Most importantly, it’s your responsibility to do your own bookkeeping. Tax season will be here before we know it, which is why it’s imperative to get those forms straightened out now. Keep reading for 1099-DIV filing tips.

About Form 1099-DIV

Form 1099 Dividends and Distributions is used to report dividends and other distributions payments to investors. What’s a dividend, you may ask? Well, dividends reported on 1099-DIV forms can include dividends paid, capital gains, dividends, and exempt-interest dividends. Form 1099-DIV reports the total amount paid by the bank or financial institution to an investor during the course of a year. The form is also used to report tax items such as Section 1250 Gain, Section 1202 Gain, investment expenses, foreign tax paid, as well as federal tax withheld.

Keep in mind that financial institutions must file this form with the IRS for each investor to whom they have paid dividends during the year, whether electronically or on paper. The bank is also required to provide a statement to the recipient to whom the dividend is paid. In terms of logistics, 1099-DIV forms will be reported on Schedule B of your personal return. Should the form be issued to a partnership or S corporation, it will be listed separately on the Schedule K-1 and end up on your personal Schedule B.

Who Should File Form 1099-DIV?

The IRS requires most payments of dividends and distributions to be reported on 1099-DIV forms by the person or entity that makes the payments. As aforementioned, most financial institutions or government agencies making dividend payments are the ones needing this form.

When is Form 1099-DIV Filed?

An organization must file this form if they:

Paid dividends (including capital gain dividends and exempt-interest dividends) and other distributions on stocks of $10 or more
Paid at least $600 as part of a liquidation
Paid or withheld any foreign tax on dividends and other distributions on stock
Withheld any federal income tax on dividends under the backup withholding rules

Are There Penalties For Not Filing Form 1099-DIV?

If you weren’t already aware, the deadline to file 1099-DIV forms is the end of February if filing on paper. Electronic files must be submitted by the end of March. That said, the deadline to provide recipient copies is the end of January. It’s important to know that the IRS imposes heavy penalties if a business fails to file in general or fails to file correct information with these forms. For example, expect to get penalized for not providing recipient copies. Not surprisingly, the penalty increases with time. That’s why it’s a good idea to file as soon as possible.

File 1099 Forms With Ease

There’s no question that filing your 1099 forms can become a nightmare. Do you really want to spend your time manually completing forms and/or purchasing expensive software to get the job done? Our team at OnlineFileTaxes.com doesn’t think you should. Thanks to our online tax reporting service, you can e-file your 1099 forms online in minutes. Whether you have one or hundreds or 1099 forms, we invite you to check out our services. Note that standard pricing includes printing, mailing, and filing services.

Why Use OnlineFileTaxes.Com?

Are you tired of managing those 1099 tax forms the old-fashioned way? Has it gotten to the point where tax forms get in the way of running your business? Then you’ve got to check out what our e-file provider has to offer. Rest assured that our service is simple, cost-effective, efficient, and secure. As long as you get your data in by the end of March, then it will be filed on time. OnlineFileTaxes.com is also an IRS-approved federal e-filing provider.

Here are just some of the benefits of working with OnlineFileTaxes.com:

Allows you to process any number of forms seamlessly and economically
Eliminates the need to invest in any software
Eliminates administrative and IT costs associated with year-end 1099 processing
Prints, mails, and electronically files with the IRS once you fill out the required forms
Supports uploading Excel files instead of manually filling out forms

With OnlineFileTaxes.com, forms cost as low as $1.25. We are proud to offer the most cost-efficient way to e-file 1099 forms. Don’t let 1099 preparation get in the way of running your business any longer. Sign up for free at OnlineFileTaxes.com.

Tips for Filing 1095-C

Tax season is just around the corner. Under the Affordable Care Act, large employers must provide information regarding their employees’ health insurance coverage on form 1095-C. Keep in mind that ‘large employer’ is one that has at least 50 full-time employees on staff. Employers are also required to file this form with the IRS on paper or electronically (online e-filing). Now that it’s the end of the year, chances are that your organization is busier than ever. But it’s imperative to take the steps now toward completing form 1095-C for your employers. Keep reading for e-file tips.

Use your 2016 employee count to determine your status for the 2017 filing year – Here’s the thing: Your large employer status is determined each calendar year. Depending on any layoffs and/or new hires, your workforce total varies from one year to the next. For 2017 only, you may use any consecutive six months of 2016 to determine if you are a large employer. Those who have fewer than 50 employees in their organization aren’t necessarily off the hook, though. Consider asking a professional if you still have an ACA filing requirement.
Multiple companies with a common owner must combine their workforce totals when determining large employer status – Let’s say the combined total of their full-time employees is greater than or equal to 50. In this case, each separate company is considered a large employer even if their individual workforces alone don’t total 50 or more. Not only that, but each separate company must complete form 1095-C for any applicable employees.
Large employers are required to file form 1095-C for every one of their full-time employees regardless of whether coverage is offered – Some employees decide to waive health coverage that is offered. That said, form 1095-C must still be filed for this employee. Such filing may seem like an unnecessary inconvenience, but it’s required.
Be extra careful when handling employee terminations and coverage – Even after an employee leaves your organization, you still may need to report information on form 1095-C about the coverage offered during the month the termination occurred. Consider this instance: If an employee terminates employment on any day other than the last day of a month and the coverage or coverage off expires upon termination of employment, then you must enter code 1H on line 14. Then again, if the coverage or coverage offer would have continued should the employer had not terminated employment during the month, be sure to enter 2B on line 16.
Not all large employers are required to enter a code on line 16 of form 1095-C – It’s important to know that Line 16 is used to indicate whether the large employe qualifies for an exception to the penalty. Remember to leave line 16 blank if no code is applicable for a given month.

Now that you know more about form 1095-C, let’s dive into two of the more commonly asked questions. First, what is the deadline to file form 1095-C? Well, it’s the end of February if filing on paper. If choosing to e-file, the deadline is the end of March. Just know that the deadline to provide employee copies is the end of January. Next, let’s review the potential penalty for failure to file form 1095-C. For 2017, the IRS will not impose penalties for filing incorrect or incomplete information if the filer/employer has made a good faith to comply with the reporting requirements. Employers that fail to file in a timely fashion may still be eligible for penalty relief if the IRS deems the standards for reasonable cause are satisfied.

Why Choose Online E-Filing?

OnlineFileTaxes.com is the preferred e-file provider nationwide. We make it easy and affordable to file your 1099 forms and other tax documentation. You can rest easy knowing your online files are electronically sent to the IRS for hassle-free filing. By working with us, there’s no need to scramble to the mailbox or office of a tax professional. For your convenience, we even print and mail recipient copies for you to keep for record purposes.

Our e-filing services are geared toward business owners, CPAs, accounting professionals, as well as benefits providers. Thanks to OnlineFileTaxes.com, you can process any number of forms seamlessly and economically. Gone are the days of needing to buy lengthy forms and expensive software. Plus, you’re able to do away with administrative and IT costs associated with year-end processing.

We understand that filing online tax forms is anything but fun. It’s no question you want to spend as little time as possible messing around with 1095’s, 1098’s, and 1099’s. Instead, you would rather put the time toward running and improving your business. OnlineFileTaxes.com allows you to file hundreds of forms in minutes.

There’s no need to look anywhere else for your e-filing needs this tax season. Sign up for free and receive forms for as low as $1.25, including printing, mailing, and e-filing.

Tips for Filing 1099-MISC

Tax season is just around the corner. As a business owner, you’ve gotten into the habit of waiting until the last second to prepare those necessary forms. But what if you bucked that trend this year? In the coming weeks, you will want to send annual reports to contract workers you paid in 2017. If you aren’t already aware, Form 1099-MISC is what you are required to send independent contractors. We hope this post will serve as a guide to properly prepare and file the form.

What to Do Before You File 1099-MISC

Check the year on tax forms – The Balance reiterates that the Internal Revenue Services changes 1099’s every year. With that in mind, be sure you have the correct year. Note that if you are sending a contractor a 1099-MISC form for 2017 work in January 2018, use the 2017 form.
Send 1099-MISC to independent contractors, not employees – Remember that this form isn’t to be given to employees. The 1099 form is meant to be sent to outside companies and contractor workers who you paid at least $600 for the year. Full-time employees, meanwhile, should receive a W-2, which we will touch on in future posts.
Ensure you have a W-9 form for each payee – A W-9 form must be completed before you send a 1099-MISC to an independent contractor. What exactly is the purpose of a W-9? Without making it too complicated, it’s used to verify that person’s tax identification number.
Order 1099-MISC forms and use the correct one – Now is the time to order the necessary forms for this tax year. Should you have a payroll service, be sure they have what they need to properly file 1099-MISC forms come January. One quick tidbit on the form itself: You must use the official one. You can’t use a 1099-MISC form you download from the Internet because the red ink on Copy A is unable to be copied.
Check for errors before you submit to the IRS – Folks make a number of mistakes when they go to file 1099 forms. From using the form for the wrong year to sending the form to the wrong company and failing to include all requested information, things happen that significantly delay the process. That’s why it’s imperative to double-check the forms prior to submitting to the IRS.
Record payments in the correct year – This is more complex than it sounds. Let’s say your company is paying a contract worker for the last week in December. However, what makes things tricky is the check was dated in January. So what year should that payment be recorded? Well, that income counts toward January.

More About Form 1099-MISC

Keep in mind that 1099-MISC forms can include rent, royalty, prizes, and awards. Typically, payments made to corporations are not reported on this form. There are exceptions to this rule in some cases. Don’t forget that medical/health care payments and attorneys’ fees must be reported on 1099-MISC forms. All businesses operating for the purpose of making a gain or profit is required to file this form. This includes the likes of nonprofit organizations, trusts, cooperatives, and government agencies.

When is Form 1099-MISC Filed?

1099 preparation is required if a business:

Paid at least $10 in royalties, brokerage payments, or tax-exempt interest
Paid at least $600 in rent, services, awards, other income payments, and medical payments
Paid at least $600 to an attorney
Made direct sales of at least $5,000 worth of consumer products
Withheld any federal income tax under the backup withholding rules

We are occasionally asked the question, “What’s the penalty for not filing Form 1099-MISC?” The answer is this: You can expect the IRS to impose heavy penalties on your business if the form is not filed or filed properly. Be aware that there is a penalty for not providing recipient copies. Over time, the penalty only increases. That said, it’s critical to file as soon as possible.

E-File 1099 Forms Today

Let this be the year you take control of tax season. OnlineFileTaxes.com is the most cost-effective way to file your 1099 forms, including Form 1099-MISC. Thanks to our online tax reporting service, you can file Form 1099 online in minutes.

What exactly makes OnlineFileTaxes.com different from other 1099 preparation services? Here are just a few of the major benefits:

Allows you to process any number of tax forms, seamlessly and economically
Takes away the need to buy and fill out long forms
Eliminates the need to invest in software or administrative/IT costs
The copy of 1099 Forms is electronically sent to the IRS for fast, simple, and stress-free filing
We print and mail recipient copies for you to keep for record purposes

It’s time to e-file 1099-MISC. Turn to OnlineFileTaxes.com for all your filing needs this tax season. Let us help you tackle 1099-MISC online.

What to Know About Your W-2 Form

Also known as the “Wage and Tax Statement,” W-2 Forms are an integral part of tax preparation. Your W-2 shows the amount of taxes withheld from your paycheck in a given year. Whether you’re getting a W-2 for the first time or could use a refresher on the form, keep reading to learn more.

W-2 Wages and Withholding

Be aware that you should only receive a W-2 Form if you are an employee. Should you be self-employed or an independent contractor, expect to receive an earnings statement on a 1099 Form instead. For the sake of this post, let’s focus on a W-2 Form. For one, it’s divided into boxes that report numerous items related to your income. When you first receive a year’s W-2, take a close look at box 1. This is where you will find your annual wage and salary payments with the amount of federal tax withheld from it in box 2.

It’s important to know that since only a fraction of your income is subject to Social Security tax, you may find that box 3 report an amount that’s less than the year’s total wages. Wages subject to Medicare and Social Security taxes can also be found in boxes on the form.

What’s Important About Your Tax Withholding?

Take a close look at your next paycheck. When an employer withholds amounts from your paycheck for federal income taxes, those amounts are remitted to the Internal Revenue Service throughout the year. In turn, the amount your employer reports on the W-2 must be subtracted from your tax bill when you prepare a federal return. It’s at this point when you know whether to expect a refund or make an additional tax payment.

Verifying Your Identity

The IRS expects the income you report on your taxes to match the information on your W-2. If it doesn’t, they will want to know why. What a lot of folks fail to realize is that since the IRS gets a copy of your W-2, it already knows if you owe tax and will likely contact you if you fail to file a return. So don’t stand pat if the name or Social Security number on your W-2 is inaccurate. Report the mistake to your employer as quickly as possible so they can resolve in time for filing.

Common Questions About W-2 Forms

Now that you have some additional background information on W-2 Forms, let’s get into some frequently asked questions.

Who needs to file it? – Any employer engaged in a trade or business that pays remunerations for services performed by an employee must file a W-2.
When is it filed? – An employer must file a W-2 if they paid remuneration, including non-cash payments of at least $600 or they withheld any income, Social Security, or Medicare tax.
What’s the deadline? – The deadline to file your W-2 is the end of February if filing on paper. You have a bit more time if e-filing, however, as the deadline is toward the end of March. Employers should know that they have a January deadline to provide employees with their copies.
What’s the penalty for not filing a W-2? – If a business fails to file a W-2, they can expect heavy penalties to be handed down from the IRS. There’s also a penalty should you not provide recipient copies. As with 1099 Forms, penalties only increase with time. That’s why it’s imperative to file as soon as possible.

How OnlineFileTaxes.Com Can Help

Whether you’re a business owner or independent contractor, you don’t have time to mess around with tax forms. That’s where online e-filing comes into play. OnlineFileTaxes.com allows you to send those necessary forms to the IRS for fast, efficient, and simple filing. For years, we have been utilized by small business owners, CPAs, accounting professionals, and individuals. Our team is proud to offer a variety of filing options for your convenience.

So why use us when there are countless other online tax reporting services? For one, OnlineFileTaxes.com allows you to process any number of forms seamlessly and economically. Not only that, but we eliminate the need for expensive software or unsightly administrative/IT costs associated with year-end 1099 processing.

Whether you want to e-file W-2 forms or start on 1095 filing, we can help. Here are some other online tax forms you can expect to find on our site:

1098-MA (Form 1098 Mortgage Interest)
1095-B
1095-C
And more

Take it from Linda Quinn, one of our recent customers. She says, “Having missed my payroll services deadline, I had to, at the last moment, go online and search for a company to prepare our 1099’s. I selected OnlineFileTaxes after looking at several sites. I was very happy with the price, timeliness, and the end result. Thanks for a job well done. I may use you again this year.”

Don’t let tax season get you down once again. Let OnlineFileTaxes.com help you take charge. Begin the online e-filing process now.

Tips for Filing 1095-B

Form 1095-B revolves around health coverage. Essentially, it reports the type of coverage you have, dependents covered by your insurance policy, as well as the period of coverage for the prior year. Form 1095-B verifies that you and your dependents have at least minimum qualifying health insurance coverage. If for whatever reason you had a break in health care coverage for the tax year, you may have to pay a tax penalty.Keep reading to learn more about filing Form 1095-B.

Minimum Essential Coverage

Keep in mind there is a minimum level of benefits your insurance must provide for you to avoid paying that tax penalty. Here are the types of insurance that provide such coverage:

Employer-sponsored health plans – These can include coverage for retirees, as well as “COBRA” coverage for former employers.
Government health care plans – Here is where Medicare Part A, Medicare Advantage, Medicaid, the Children’s Health Insurance Program, and other similar plans fall into place.
Coverage purchased through the “Marketplace” – Under the Affordable Care Act, these consist of web-based federal and state insurance markets.
Any individual health insurance policy you had in place before Obamacare took effect.

What to Know About Form 1095-B

There are four parts to this form. Here’s what you can expect with each:

Part I – This identifies the person whose name is on the policy. This would be the name of the employee for an employer-sponsored plan.
Part II – If your coverage happens to be employer-sponsored, this part will identify the employer.
Part III – This section identifies the insurance company who is providing the coverage.
Part IV – This is easily the most extensive part of the form. Part IV lists the people in your household who are covered by the insurance. Be aware that for each name, there is a box that will be checked if the person was covered for all 12 months of the year. If that person wasn’t covered for the entire year, there is a box for each month. Again, there will be a penalty assessed with partial coverage (in the majority of cases).

Why Form 1095-B is So Important

Submitting Form 1095-B is proof that you had coverage required by the Affordable Care Act. But what about the penalties? If you fail to file correct information returns or fail to furnish a correct employee statement, you may be subject to a penalty. Gaps in coverage of three months or less are exempt from the penalty. With that said, the IRS will not impose a penalty for filing incorrect and/or incomplete information if the filer/employer has made the effort to comply with reporting requirements. Those who are uninsured may still be able to avoid a tax penalty if they have an exemption. These are available for several reasons such as financial hardship and membership in certain groups.

As far as the deadline is concerned, you must file Form 1095-B by the end of February. However, if filing electronically, the deadline is the end of March. Employees must be provided their copies by the end of January.

Why Choose Us for Online E-Filing?

OnlineFileTaxes.com is an e-file provider approved by the Internal Revenue Service. With us, you can quickly and easily e-file 1099 forms. Feel at ease knowing that your online files will be electronically sent to the IRS for fast, efficient, and hassle-free filing. Whether you’re a business owner, CPA, accounting professional, or individual, you can reap the benefits of OnlineFileTaxes.com.

There are plenty of e-file options out there. So why choose us? For one, you can easily manage all of your 1099 tax forms with our do-it yourself online service. Why worry about mailing delays and spending countless hours filling out lengthy forms. OnlineFileTaxes.com does the following:

Allows you to process any number of forms seamlessly and economically
Removes the need to buy and complete a myriad of forms
Eliminates the need to invest in any software
Takes away any administrative and IT Costs associated with end-of-year 1099 processing
Prints, mails, and electronically files with the IRS once the forms are completed
Supports uploading Excel files as opposed to manually filling out forms and being more susceptible to making a mistake

How to E-File

Take your pick between three convenient options:

E-File + print + mail – Let us take care of your e-filing needs with the IRS. We will also print and mail (or e-deliver) copies to recipients.
E-file only – Maybe you have already provided copies to your recipients and just want us to report to the IRS. If that’s the case, this is the ideal choice.
Print and mail only – Allow us to print and mail recipient copies. It could be that you have previously submitted information to the IRS but want us to provide recipient copies. In this instance, this third option makes the most sense.

Whether you want to e-file W-2 Forms, 1098-MA, 1095-C, or 1095-B, we can help. Get started e-filing today.