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Miss This Crucial Tax Step and You Could Face Stiff Penalties

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The IRS is getting stricter in 2017.

For business owners, the need to file information returns with the Internal Revenue Service — Forms W2 and 1099 are well-known examples, but there are many others — is nothing new.

But new legislation means the penalties for failing to file them have increased significantly, MarketWatch reports.

Information returns for payments made this year should be filed with the IRS in early 2017. Some of them have to be sent to payees, too.

MarketWatch provides a rundown of the various penalties that increased based on 2015 legislation.

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A couple of the “highlights” for “small taxpayers,” who have gross receipts of $5 million or less per year:

Unintentionally failing to file an information return with the government now brings a penalty of $250. Previously, the penalty was $100.

Multiple unintentional failures within a calendar year can bring a maximum penalty of $1 million. The previous maximum penalty was $500,000.

As for willful failure to file information returns — you don’t want to go there. A single failure of this nature can bring a penalty of $500 or more, and there’s no cap on the penalties for multiple failures in a given year.

Read more at MarketWatch

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