As another calendar year-end draws closer here in Q4, you aren't likely thinking too seriously about filing your 2023 1099s and W2s come the end of January. While that could be expected, you should be aware of the fact that for the first time in about 45 years, big changes to the paper form filing limit will be upon you in three short months as the upcoming holiday season winds down. Starting this year, the paper filing limit has been reduced from 250 forms to 10 paper forms. In other words, if you have more than 10 1099s and W2s or any combination of thereof that exceeds 10 in total, you must file your forms with the Internal Revenue Service (IRS) electronically. The days of stuffing envelopes or boxes with a big stack of paper forms are officially over!
From a historical perspective, the IRS introduced the option to file tax forms by way of magnetic tape in the 1960s. This was back in the days when mainframe computers commonly used magnetic tape situated on reels to store data. The "Magnetic Media Filing Program" set the limit for filing with paper forms to a maximum of 250 beginning in 1979. Companies filing more than 250 forms were then required to file "magnetically" with the IRS. By the 1980s, the magnetic filing format evolved to include floppy diskettes, albeit still a form of "magnetic" media. The IRS introduced the Modernized e-File (MeF) system in 2004 to allow businesses to electronically file various tax forms, including the ubiquitous 1099s, via the Internet. The Tax Payer First Act of 2019 included the following provision, "Sec. 2301. Electronic filing of returns. Currently, the IRS can only require individuals filing more than 250 returns to file them electronically. This provision eventually would lower that threshold to 10 or more returns." On February 23 of this year, the IRS made it official. So there you have it and unless you will be filing fewer than 10 tax forms (e.g., W2, 1099-NEC, 1099-Misc) in total in early 2024, then you are required by law to file electronically.
Fortunately for users and prospective users of SYMPAQ software, we offer an affordable solution to your e-filing needs. We have partnered with Greatland Corporation once again this year in integrating Yearli in order to efficiently and securely file your 1099s and W2s. While we strive to provide compliance with the Department of Defense's accounting system audits conducted by DCAA, we also make certain that compliance is extended to the Department of the Treasury's auditing arm, namely the IRS. We're all about making your life less stressful with standards-based software products and ongoing user support.