Small Business Owners May Face Changes in W-2 Filings
Unfortunately, identify theft is something we've all become very familiar with during the past few years. We have heard countless stories of criminals who steal someone's personal and credit information and ruin their financial lives. More recently, this type of information has been stolen via some of America's most trusted brands as consumers check out in stores across the country.
Recently we learned just how much these identity thieves have fleeced the Internal Revenue Service (IRS), and ultimately taxpayers of, in our country. According to the Treasury Inspector General for Tax Administration, the IRS lost $3.6 billion through identity theft in 2011 - this is confirmed dollars lost.
Are you asking yourself how do these criminals do it? According to federal auditors, criminals claim tax refunds using stolen taxpayer ID information and Social Security numbers before the IRS has time to verify their returns against mailed-in employer wage forms.
Just last year, thieves stole an estimated $5.2 billion from the Internal Revenue Service (IRS). In September, the Government Accountability Office recommended that Congress should consider changing the deadline for employers to submit wage information to the IRS.
What does that mean for small business owners?
While changes will not happen overnight, the solution would require employers to file in January electronically rather than submit electronic W-2 forms by March 31 and paper W-2 forms by February 29 annually. As the tax code is written today, SBOs do not have to file electronically.
We know that SBOs have more than enough to think about to keep their businesses running. Clearly, the new proposed deadline would cut the time employers have to file by at least a month - and entrepreneurs already face a myriad time challenges. Losing this time accompanied with online filing requirements could negatively impact many businesses. Consequently, SBOs need to ensure that they have the best tools and resources to help them navigate in the ever-changing regulatory environment. You'll want to be sure that your payroll company or payroll software are up to date in this area.
No matter what tax changes happen at the federal, state and local level, you can rest assured that SurePayroll will update our online payroll service with new rules and regulation, helping SBOs to file taxes and report employee earnings.
We will keep you posted as the IRS and Congress work to determine whether or not to implement the recommendations.