As much as we’d like to focus on it, we at YES! Your Human Resources Solution know that year-end in the office isn’t all about parties and gift exchanges.  Some offices are closing their books, many are juggling holiday time-off requests, and all are thinking about year-end deadlines for Forms W-2 and 1099—or they should be.  With all the holiday hustle and bustle, even routine deadlines can become last-minute fires or slip through the cracks entirely.  Small businesses and those that use numerous contractors are particularly susceptible.  So while we’d all like to think we’d never miss a deadline, it happens.  We just need to know how to deal with it!

For starters, what is the deadline for distributing 2012 Forms W-2 and 1099?  According to the IRS, these forms should be mailed to employees no later than January 31.  (For forms sent through the postal system, this means physically depositing the forms in a mailbox on or before January 31.)

So what happens if that deadline goes by unmet?

Fines.  A day or two late might go unnoticed, but dally too long and risk the wrath of the IRS.  Your company can get hit with a fine for each form that goes out after the deadline, with no maximum penalty.  And what else, employees want their forms on time.  They have personal “books” to prepare too, especially if they’re expecting a tax return!  Not only do late forms cause angry workers, but those workers are more apt to tattle on you to the IRS—hence, greater potential for being hit with those fines.

But don’t go sending out forms willy-nilly to meet the deadline.  Their accuracy is critical.  These forms have serious implications for employer and employee, which run deeper than a few dollars’ difference in taxes due.  If you claim to have paid a worker a different amount than you actually did, that worker can sue the company for damages.  The company may also be subjected to a fine from the IRS for filing a false document.  Assuming neither of these is a desirable circumstance for your company, take time to ensure Forms W-2 and 1099 are accurate—even if it means the forms will be furnished late.

Although being late is not an enviable position, take heart!  If you know you’re not going to make the deadline, a little preparation can save the company a lot of headache.  Most important, you may request an extension by sending a letter to the IRS before the due date to furnish Forms W-2 and 1099.  (If more than ten employees are affected, this request must be filed electronically.)  Also communicate to employees that you’re running late with the forms, but that you are working on getting them out soon.  You may not have been able to prevent being late, but these measures will ensure the least fallout from the situation.

One last tidbit: to cover your bases, if a form is mailed and the post office returns it as undeliverable, simply file the unopened document in the employee’s personnel file.  This serves as proof that the document was mailed appropriately, and the document remains on file in case the employee goes looking for it later.

It’s easy to get lost in the winter whirl!  Try to stay grounded during this time by keeping one eye on the calendar and the responsibilities that come just after the festivities end.  Until then, let’s all enjoy the holiday season!