The Internal Revenue Service (IRS) has warned taxpayers, as well as employers and businesses, that they may face penalties for failing to file the required tax forms by the Jan. 31 deadline.

According to Newsweek, workplaces could incur fines for late, incorrect or incomplete filings. The deadline applied to several forms that employers were required to submit to federal agencies and send out to employees and contractors.

Here’s what taxpayers and organizations need to know about required tax forms, the types of penalties, and how much they could cost. The following are the required tax forms for employers and businesses:

About Form W-2, Wage and Tax Statement

This form requires employers and businesses to file with the Social Security Administration and send a copy to the employee, according to Newsweek and the IRS website.

Any employer who pays $600 or more in wages or other compensation for the year, including noncash payments, must file a Form W‑2 for each employee, even relatives, from whom:

-Income, Social Security or Medicare taxes were withheld.

-Income tax would have been withheld if the employee claimed one or fewer allowances or did not claim exemption on Form W‑4.

Form W-3, Transmittal of Wage and Tax Statements—Sent With Form W-2

The W-3 is a tax form employers and businesses must provide, along with the W-2, which states the total wages paid, total Social Security and Medicare taxes, and total taxes withheld across all their employees.

Form 1099-NEC, Nonemployee Compensation

The 1099-NEC is an IRS form used to report nonemployee compensation, including fees, commissions or other payments to freelancers, independent contractors, gig workers, service providers and self-employed workers, per Newsweek and H&R Block.

This form reports the following:

-Payments of $600 or more made to independent contractors.

-Fees, commissions, prizes or awards for services.

-Payments for professional services (e.g., lawyers, accountants, consultants).

-Any compensation not considered wages (i.e., not reported on a W‑2).

What types of penalties can be applied and how much?

If employers or businesses did not file these forms before the deadline or did not request a 30-day extension through Form 8809 as an application to apply for more time, they could face certain penalties, Newsweek and The U.S. Sun reported.

The fines can be applied based on the timing and accuracy of the forms, and the amount could increase the longer it takes for the documents to be submitted.

The lesser penalty is set at $60 for each return filed more than 30 days late. Meanwhile, a $130 fee can be added for returns that are 31 days late through Aug. 1. If returns are filed after Aug. 1, a $340 fee will be applied. If workplaces have completely disregarded the forms, there would be a $680 fee per return with no maximum limit.

The IRS also charges interest on unpaid penalties until the full amount is paid.

Taxpayers who are unable to pay their taxes are advised to pay whatever they can afford, and later apply for a payment plan to avoid more penalties and interest.

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