Missed the January 31 IRS deadline? Here's all about the penalties you should know

The Internal Revenue Service (IRS) had marked January 31 as the deadline for submitting certain tax forms, and now that it has passed, late filers could be subject to penalties or additional charges. Employers and businesses were asked to file three different tax forms, namely Form W-2, Form W-3, and Form 1099-NEC, with the IRS by January 31. However, now that the date has passed, not just late filers, but those who did not request an extension, filed the form incorrectly, or failed to provide the correct forms to recipients, will also have to pay penalties, as per a Newsweek report. 

The forms that needed to be filed with the IRS by January 31 are mostly related to employers and businesses. They include Form W-2. a wage and tax statement that employers must file with the Social Security Administration before providing each employee with a copy. According to the Newsweek report, this form reports an employee’s total wage along with any deductions from their salary, including federal income tax, Social Security and Medicare taxes, and any state and local taxes. 

The next form on the list is Form W-3, which is used to submit wage and tax statements to the IRS. It accompanies Form W-2 and deals with the total wages paid and total taxes deducted, including social security and medicare taxes, across all employees in an organization. Lastly, employers and businesses were also supposed to submit Form 1099-NEC to report what they pay independent contractors and freelancers, who aren’t on the official employee list. It should also be noted that every employee must be provided with a copy of Form W-2, while non-employees should receive a copy of Form 1099-NEC before the due date. 

Now that the last date of filing has passed, employers and businesses will have to pay fines based on how late they file the required forms. The most basic tier of penalties is $60 per return if filed within 30 days of the missed due date. This will jump up to $130 per return if companies file it after 30 days but before August 1. Following August 1, the penalty will go further up to $340 per return, while intentionally disregarding the IRS’s instructions can lead to a fine of $680 per return with no maximum limit. On the other hand, there are separate penalties for those who fill the form incorrectly or fail to provide copies to their employees.

The Newsweek report also mentions that the IRS will charge interest on unpaid penalties until the full amount is recovered, although taxpayers can opt to make a partial payment and then enroll in a payment plan to settle the remaining balance. 

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