Tax Season: What It Means for Employers and How to Handle It Smoothly

Tax Season: What It Means for Employers and How to Handle It Smoothly

Tax season is busy for both employees and employers. Employers juggle payroll, year end filings, and multiple deadlines, all while employees ask questions about their forms and withholdings.

Below is a practical guide to what typically happens during tax season from the employer side and concrete steps to handle it efficiently and compliantly.

1. Core Federal Tax Season Responsibilities
Wage and tax reporting (employees and contractors)

Around January and early February, employers handle year end reporting for the prior calendar year:

Form W 2 (Wage and Tax Statement)

What it is: Reports each employee’s annual wages and tax withholdings.

Typical timing:

Provide a completed W 2 to each employee.

File copies with the IRS and Social Security Administration (SSA), often by early February (check the IRS site for the exact date each year).

Reference: IRS W 2 information – https://www.irs.gov/forms-pubs/about-form-w-2

Form W 3 (Transmittal of Wage and Tax Statements)

What it is: A summary of all W 2s issued.

Filed with the SSA along with the W 2s, typically by early February.

Reference: SSA W 3 information – https://www.ssa.gov/employer/

Form 1099 NEC (Nonemployee Compensation)

What it is: Reports payments of $600 or more to independent contractors or freelancers.

Typical timing:

Furnish 1099 NEC to each contractor.

File with the IRS usually by early February (paper and electronic deadlines can differ; verify annually).

Reference: IRS 1099 NEC info – https://www.irs.gov/forms-pubs/about-form-1099-nec