January is prime time for compliance slip-ups that quietly turn into bigger problems later—loss of good standing, IRS penalties, or unpleasant surprises during fundraising. These are the January deadlines early-stage startups most often overlook.
January 31 — W-2s and 1099s
You must furnish W-2s to employees and 1099-NEC / 1099-MISC forms to contractors for 2025 payments. Copies are filed with the SSA/IRS shortly after (paper filings typically due in late February; electronic filings by March 31).
Payroll providers handle much of this, but they often miss edge-case contractors or misclassified workers. Penalties generally start at $60+ per form if filings are late or incorrect.
January 31 — ISO Reporting (Form 3921)
If any employee or former employee exercised incentive stock options (ISOs) in 2025, the company must provide Copy B of Form 3921 to the individual by January 31.
Copy A is filed with the IRS later (paper by late February; electronic by March 31).
This requirement is frequently missed because it sits outside normal payroll workflows and is triggered only by ISO exercises. Penalties can add up quickly, though caps are lower for small businesses.
State Annual Reports
Many states require annual reports or similar filings early in the year, often between January and April depending on the state and entity type.
Examples:
- Delaware corporations: March 1
- Washington corporations and LLCs: based on anniversary date
Missed filings can result in late fees, loss of good standing, or administrative dissolution—issues that tend to surface during financings, audits, or diligence.
Bottom line
Startups rarely run into trouble because of one missed filing. Problems arise when small oversights accumulate quietly over time. January is the best moment to clear these items before the year accelerates—set reminders, double-check with payroll and equity platforms, and consider a short compliance review now rather than dealing with penalties or delays later.
