For small business owners, it may be rare that you are filing W2 and 1099 together. But there will be times when your company has to file both. You may even need to file both for the same person.
Before doing so, make sure you know two things. The first is how you should separately file these forms. The second is understanding when you should file the forms together.
How Do You File W2 Forms?
The most important thing to remember is you must distribute Form W-2 by the Jan. 31 federal deadline, unless otherwise specified. If you are filing W2 and 1099 together, there are three ways to complete the Form W-2 process.
In-Person – Distributing Form W-2 in-person works if everyone is in the same office. Your accountant can generate W2 forms using our 1099 Software Filer. You can print these forms on pre-printed forms. You do not need to print employee copies using special paper or ink.
Electronically – Many employees work remotely due to the coronavirus pandemic. Sending electronic W2 forms may make more sense for your company. However, you need to receive your employees’ consent. Using our software, you can create encrypted PDF files. Companies can then email reports to clients directly from the software when they are filing W2 and 1099 together.
Through the Mail – As an employer, you can also send Form W-2 through the mail. It might cost extra if you have the forms sent directly to their doors. However, doing so eliminates the chance of errors. Make sure to use privacy envelopes and include Forms W-3.
How to Prepare 1099 Forms
When you file Form 1099-NEC, you need to send copies to a few recipients.
The IRS – Companies should submit Copy A with Form 1096. A 1096 details each 1099 form that you issued to an independent contractor. The form also reports the total dollar amount of contractor payments.
Department of Revenue – You will send Copy 1 of the form to your state’s department of revenue.
Independent Contractor – You are responsible for sending Copy B to the recipient.
Keep Copy C for your company’s records. It shows the wage expense that you will disclose on your company’s tax return. Make sure you produce Form 1099-NEC on or before Feb. 1. If you use our software, you can digitally file your year-end forms to the IRS or SSA.
When Should You Be Filing W2 and 1099 Together?
There are two circumstances when you will file both forms for the same independent contractor. The first is when a worker provides services as an employee and independent contractor for the same employer at the same time. The second instance is when a worker holds two jobs for the same employer within the same tax year.
Regardless of the circumstances, using a reliable tax software makes filing easier on a small business. These forms can easily overwhelm a company. Our software can help you organize your forms and maintain your company’s records.