Independent Contractor Compliance Blog - by Collabrus™

Because there are a whole bucket of reports and taxes that must be filed and paid this time of year. Think of the next couple months as the Holiday Season for Tax People!

What’s happening?

Due by January 31, 2010

• Forms W-2: You must furnish each employee a completed Form W-2, Wage and Tax Statement. You typically have until March 1, 2010 to send the federal government its copies of the W-2, unless you file them electronically then you have until the end of March.
• Form 1099: You must furnish your independent contractors and consultants a Form 1099.
• Form 941: File Form 941, Employer’s QUARTERLY Federal Tax Return, for the fourth quarter of the 2009 and deposit any owed income tax withheld, social security, and Medicare taxes.
• Form 944: File 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 do so.
• Form 940: 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.
• Form 945: File Form 945, Annual Return of Withheld Federal Income Tax, to report any nonpayroll income tax withheld in 2008.

Due by February 16, 2010

Exempt Forms W-4 have expired: Any Form W-4 previously given to you claiming exemption from all withholding has expired. If you have not received a new form, that renews the exemption; by yesterday you are required to begin withholding today.

Due by February 28, 2010

Paper Forms 1099 and 1096: Send Copy A of all paper Forms 1099 with Form 1096, Annual Summary and Transmittal of U.S. Information Returns, to the IRS. If you will be filing electronically you have until March 31.

Paper Forms W-2 and W-3: Send Copy A of all paper Forms W-2 with Form W-3, Transmittal of Wage and Tax Statements, to the Social Security Administration (SSA). If you file electronically you have until March 31.

Paper Form 8027: Send paper Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, to the IRS. If you file electronically you have until March 31.

Due by March 31, 2010

Electronic Forms 1099, 8027, and W-2: All the above forms you waited to send until March 31, 2010, are due now. 

Due by April 30, July 31, October 31, and January 31:

FUTA taxes: Deposit federal unemployment (FUTA) tax due, each quarter, if it is more than $500.

Form 941: Each quarter file Form 941 and deposit any un-deposited income tax withheld, social security, and Medicare taxes due. You may pay these taxes with Form 941 if your total tax liability for the quarter is less than $2,500.

There’s more…

I did not include any state requirements and I probably left out a couple hundred, less common federal forms, but I think you can see why government tax administrators get cheered up this time of year.

In addition to the collection of tax revenue, the government employees get access to a rich stream of fresh data to analyze. This is another input which they will use as they select fresh audit targets as they continue their crusade to close the “tax gap.” Be forewarned: they are increasingly focusing attention on independent contractor (1099) compliance, one of the identified “heavy contributors” to the tax shortfall.