Have you heard about the new filing due date for form W-2?
For returns related to the previous year, Form W-2 must be filed with the Social Security Administration no later than January 31, 2017.
This is the result of a law passed by Congress in 2015, the Protecting Americans from Tax Hikes (PATH) Act of 2015, which was signed by President Obama in December of last year.
Previously, the filing deadline was the last day of February, unless one was filing electronically, in which case the date was March 31st. Also important to note, similar to previous years, W-2 forms will still need to go out to employees by January 31st. As a result, the government will receive the filing data at the same time as employees.
For business owners, this means ramping-up data-reporting efforts earlier than in years past, giving them less time to ensure that all data is accurate. The change arises from the need to address Stolen Identity Refund Fraud crimes. An earlier filing date gives the IRS more time to identify fraudulent returns, so that it can correct any issues before refunds go out. While this helps target fraud and identity theft, the rush to file on time could lead to more errors, resulting in more people having to file their taxes twice.
Many employers may find that enlisting a cloud accounting system may ease the burden of the new filing deadline. Cloud accounting systems may contain built-in expense reports that can be easily designed to match expense categories. The built-in accounting expertise, data backup and data security of a cloud accounting system may also help small businesses meet their filing deadlines.
With 2016 well underway, it is never too early to start planning for when you must file this year’s taxes. Avoid the rush with prep work ahead of time, so that you can stay ahead of annual tax season and avoid unnecessary stress down the road.