Tax season can feel like navigating a maze of forms, deadlines, and complex IRS rules—especially for small business owners. Whether it’s employees, contractors, or vendors, each payment type comes with its own set of tax forms and filing requirements. Yet, missing a deadline or making a mistake can lead to hefty penalties, making it essential to get it right the first time.
In this guide, we’ll address some of the most common questions from small businesses during the tax information reporting process. Whether you’re a first-time filer or a seasoned business owner, discover everything you need to know to stay organized and compliant this tax season.
Which forms does my small business need to file, and when?
One of the first steps in mastering tax information reporting is understanding the various IRS forms your small business is required to file. These forms serve different purposes depending on who you’re paying—employees, contractors, vendors, etc.—and what types of transactions have occurred throughout the year.
Getting familiar with these forms can save time, headaches, and, most importantly, the risk of non-compliance penalties. Let’s break down the most common forms small businesses will likely encounter, as well as their reporting deadlines.
| Form | Purpose | Deadline |
| 1099-NEC | For reporting non-employee compensation paid to contractors or vendors. | January 31 (to IRS and recipients) |
| W-2 | Used to report wages and tax withholding for employees. | January 31 (to employees); February 28 (paper) or March 31 (electronic) to SSA |
| 941 | Quarterly report on federal payroll taxes, including Social Security and Medicare taxes. | Last day of the month following the end of each quarter |
| 945 | Annual return for withholding federal income tax from nonpayroll payments. | January 31 |
| 1042 | Annual return for withholding tax on payments to foreign persons. | March 15 (to recipients and IRS) |
| 1099-MISC | For reporting miscellaneous income, such as rent, prizes, or awards. | January 31 (to recipients); February 28 (paper) or March 31 (electronic) to IRS |
| 1099-INT | For reporting interest income paid by the business. | January 31 (to recipients); February 28 (paper) or March 31 (electronic) to IRS |
| 1042-S | To report income paid to foreign persons and tax withheld on such income. | March 15 |
| 1099-DIV | For reporting dividends paid to shareholders. | January 31 (to recipients); February 28 (paper) or March 31 (electronic) to IRS |
| 1098 Series | For reporting mortgage interest, tuition, or other tax-deductible payments. | January 31 |
| 1095 | For reporting health insurance coverage for employees. | March 2 (to recipients); March 31 (electronic) to IRS |
| 5498 | To report contributions made to IRAs. | May 31 |
What happens if my company misses a tax filing deadline?
Missing a tax filing deadline can lead to costly penalties from the IRS, and the longer the delay, the higher the penalty. The IRS breaks down penalties into three tiers:
- First-tier penalty: $50 per form for filings up to 30 days late.
- Second-tier penalty: $120 per form for filings more than 30 days late but before August 1.
- Third-tier penalty: $310 per form for filings after August 1, or for completely failing to file.
If you realize you are going to miss a deadline, you can file for an extension (Form 8809), which gives you an additional 30 days to file with the IRS. Keep in mind, though, this extension only applies to the filing with the IRS, not to the deadline for distributing forms to recipients.
Never miss a deadline again. Download our month-by-month Tax Information Reporting Checklist for small businesses.
I made an error on a filed form. What do I do?
Mistakes are bound to happen when dealing with the complexities of tax reporting yourself. Whether you mistyped a recipient’s name, reported the wrong amount, or submitted incorrect Taxpayer Identification Numbers (TINs), act swiftly to correct these errors and avoid penalties.
First, carefully review the mistake. Is it a minor typographical error, or does it affect significant financial details such as the amount paid, TIN, or the recipient’s name? The type of error determines how urgently it needs to be addressed.
Common tax information reporting errors small business make include:
- Incorrect dollar amounts: Misreporting payments, compensations, or interest income.
- Invalid TIN or Social Security Number (SSN): Errors in these fields can result in IRS penalties or Notices (CP2100 or CP2100A).
- Incorrect names: This happens when the name on the form doesn’t match what the IRS has on file for that TIN.
(Pro tip: TINCheck by Sovos offers real-time and bulk TIN matching services, enabling businesses to catch and correct errors before they file.)
Time is of the essence when correcting tax errors. The longer you wait, the higher the chances of facing penalties. IRS penalties can escalate quickly, with first-tier penalties starting at $50 per form for correction made within 30 days of the filing deadline, to third-tier penalties at $310 per form.
Filing an extension using Form 8809 is also an option if you realize you need more time to correct the errors. Remember, this only extends the IRS filing deadline, not the deadline to provide recipients with accurate forms.
Is an e-Filing platform worth the investment?
Manually filing forms can turn into a never-ending cycle of paperwork, double-checking information, and racing against deadlines. Plus, the IRS lowered the electronic filing threshold to just ten returns as of tax year 2023. So, if your business files more than ten returns, it’ll need to be done electronically.
Still, electronic filing via IRS systems can be a lengthy manual process, with the need for business Transmitter Control Codes (TCC), multi-step verification processes, and—in some cases—several different login credentials.
However, with an e-Filing platform, tax season doesn’t have to be stressful. Just upload your data, and the platform handles everything—submitting forms to the IRS and recipients, making corrections if needed, and ensuring deadlines are met. It’s like having a tax reporting assistant on call 24/7, without the extra paperwork.
e-Filing eliminates the need to print, manually fill out, or mail physical forms. Instead, everything is done digitally, streamlining the entire filing process. You can submit forms in bulk, which is particularly helpful if you’re filing for multiple employees or contractors. Plus, you’ll know when the IRS or Social Security Administration has received and accepted your forms, which gives you peace of mind and helps you stay on top of deadlines.
Get started with eFileMyForms today and set yourself up for success this tax season.