REMINDER: W-2s and 1099s MUST BE FILED ELECTRONICALLY IN 2024
Each January, businesses are required to file certain tax forms for each of their employees and for each independent contractor the business paid at least $600 to during the year. One copy of the form is given to the employee/independent contractor, and one copy is filed with the federal government.
The tax form for employees is a Form W-2 and shows the total wages the business paid the employee during the year that just ended. Businesses must give a W-2 to each employee by January 31st of each year and must also send a copy of each W-2 to the Social Security Administration by January 31st.
The tax form for independent contractors is a Form 1099 and must be given by January 31st to each independent contractor (except for corporations and LLCs) that the business paid $600 or more to during the year. A copy of each 1099 must be sent to the Internal Revenue Service by January 31st.
Until now, businesses issuing fewer than 250 of these tax forms a year could mail in the copies of their W-2s and 1099s to the government. However, beginning in 2024, businesses that issue ten or more W-2s and/or 1099s (added together) will have to start electronically filing copies of all these forms with the government. The filing deadline remains the same: January 31st.
To determine if your business is required to file electronically, add together the number of W-2s and 1099s your business will issue for 2023. If your business has 10 or more combined, you will now need to start sending these forms to the government electronically. You can still give paper copies to the employee/independent contractor.
Here is an example: In 2023 a business had seven employees on payroll and also paid four individuals more than $600 each during the year. The business issues a total of eleven tax forms: a W-2 to each of the seven employees and a 1099 to each of the four independent contractors. Previously, the business mailed copies of these forms to the IRS and Social Security Administration. In 2024, however, the business must file their copies electronically because they have issued more than ten total tax forms.
Copies of W-2s and 1099s are sent to two different places: W-2s are sent to the Social Security Administration and 1099s are sent to the IRS.
To electronically file copies of W-2s with the Social Security Administration (SSA), go to the SSA’s website. You will need to create an account with the SSA’s online tool called Business Services Online (BSO). The SSA is holding weekly webinars for small businesses on how to register with BSO to report their W-2s next month.
To electronically file copies of 1099s with the IRS, use the Information Returns Intake System (IRIS) portal. You will need to create an IRIS account before filing. The IRS has a short video on their website explaining the registration process.
Hardship waivers may be available for businesses that would have trouble complying with the e-filing requirements. Businesses needing to apply for a waiver must file Form 8508 with the IRS.
For more information about how the new e-filing threshold will affect your business, please contact your local accountant or tax professional.
ANOTHER SALES TAX HOLIDAY ON SCHOOL SUPPLIES
The state is holding another sales tax holiday on school supplies from January 1st through January 14th, 2024. For these two weeks, the following items will be exempt from the Florida sales tax:
- School supplies with a sales price of $50 or less.
- Clothes, shoes, and accessories with a sales price of $100 or less.
- Learning aids and jigsaw puzzles with a sales price of $30 or less.
- Personal computers and some computer accessories with a sales price of $1,500 or less when purchased for personal use (not business use).
Businesses selling these items must report sales of tax-free items as exempt sales to the Florida Department of Revenue on their next sales tax filing after the tax-free holiday.
Businesses may choose not to participate in the back-to-school tax holiday if these items made up less than 5% of their gross sales in 2023. To opt out, a business must send written notice to the Florida Department of Revenue on company letterhead stating that the business meets these qualifications and has chosen not to participate in the sales tax holiday. The notice must be signed by someone authorized to sign on behalf of the business and can be emailed to email@example.com or faxed to 850-922-0859.
Eligible businesses that opt out of the sales tax holiday must post a notice in a conspicuous location telling customers that they are not participating in the Back-to-School Sales Tax Holiday. A suggested notice is:
In accordance with Chapter 2023-157, Laws of Florida, (Name of business) has chosen not to participate in the Back-to-School Sales Tax Holiday January 1, 2024 through January 14, 2024. For questions, please contact (name of contact person at business) at (contact phone number or email).
The notice must include a signature from an authorized individual along with that person’s title.
For more information or to review the complete list of tax-free items, please visit the Florida Department of Revenue’s website.
WORKERS’ COMP INSURANCE RATES WILL DECREASE AGAIN IN 2024
The price that insurance companies can charge for workers’ compensation insurance is set by the State of Florida each year. For 2024, the state has ordered a reduction in the price of workers’ comp for Florida businesses. Rates will be reduced by an average of -15.1% and is the seventh straight year workers’ comp rates have dropped.
Your workers’ comp premium is determined by applying the rate for the class codes on your policy to your company’s payroll. The new rates will be applied to your policy when it comes up for renewal in 2024.