Editor's note (updated October 2, 2026): The payroll examples below concern 2026 payments reported in 2027. BOI guidance reflects FinCEN's August 2026 final rule; U.S.-created companies are exempt. See our post on the final rule.
January Filing Deadlines Startups Commonly Miss (And How to Avoid Costly Penalties)
January is a useful time to reconcile payroll, review state filing calendars, and check equity records. Some obligations have annual deadlines; others depend on a stock transfer, grant, or company-specific renewal date. Here is what to check, with the filing year made explicit.
W-2s and 1099s: The Contractor vs. Employee Question
For 2026 wages, the ordinary deadline to furnish Forms W-2 to employees and file with the Social Security Administration is February 1, 2027, because January 31 falls on a Sunday. The same weekend adjustment applies to the ordinary 2026 Form 1099-NEC filing and recipient deadline. Other 1099 forms can have different deadlines. See the 2026 W-2 instructions and IRS 1099-MISC and 1099-NEC instructions. Founder wages can require a W-2 too.
Choose the form after determining the worker's status. A contract calling someone a consultant does not settle the tax classification.
For federal employment taxes, the IRS considers behavioral control, financial control, and the nature of the relationship. Evaluate the whole relationship and document the facts; no single factor determines the result. See the IRS worker-classification guidance.
There is no rule that working a few hours a week makes someone an employee, or that working fewer than 10 or 15 hours makes someone a contractor. Part-time workers can be employees. State employment-law tests may differ from the federal tax test.
Late or incorrect information returns and late or incorrect recipient statements can each trigger penalties. Amounts depend on the filing year, correction timing, and other facts; intentional disregard carries higher penalties. Penalty relief may apply if you had a good excuse. Use the IRS information-return penalty guidance rather than treating one dollar amount as universal.
Resolve classification questions with your payroll and legal advisers before filing, and correct identified errors promptly. Issuing a form alone does not cure an underlying classification problem.
Form 1099-NEC vs. 1099-MISC: Which One?
If you do have legitimate contractors, you need to know which form to file. For years, accountants would issue 1099-MISC for independent contractor payments. But the IRS moved nonemployee compensation to 1099-NEC starting in 2020, and a lot of people still don't realize it.
Form 1099-NEC generally covers reportable nonemployee service compensation. Form 1099-MISC covers other specified categories, including rent and medical payments. Corporate-payee exceptions and payment-method rules matter; payments reportable by a settlement entity on Form 1099-K are not duplicated on your 1099-NEC. Check the IRS instructions for the applicable payment year.
For 2026 payments, the general nonemployee-service reporting threshold is $2,000 or more paid by your business to that payee during the year, subject to exceptions. Another customer’s payments do not push your own payment over that threshold. Backup withholding can require reporting below the threshold. The ordinary threshold for 2025 payments was $600; apply the rule for the payment year. See the IRS 1099-MISC and 1099-NEC instructions.
Delaware Franchise Tax: The Two Methods and Why You Need to Pay Attention
If you're incorporated in Delaware—and many startups are, especially if you've taken venture funding—you owe Delaware franchise tax and must file an annual report each year. The deadline is March 1—not January—but the calculation trips people up, so it's worth sorting out early.
Delaware provides the Authorized Shares and Assumed Par Value Capital methods. Compare the applicable calculations and pay the lower permitted amount. A company with many authorized shares can receive a substantially lower calculation under the second method, but that result is not guaranteed.
The Assumed Par Value Capital calculation uses issued shares and gross assets, along with the company's capital structure. Its minimum tax is $400, with the annual-report fee separate. Authorized share count alone does not establish what the company owes under that method.
Gather the required figures and follow the Delaware Division of Corporations instructions. Revenue alone is not the basis for choosing between the methods. Larger tax liabilities can also require quarterly estimated payments.
Annual Reports: Who Requires Them in January?
Track annual reports in every state where the company is incorporated or registered. Washington does not impose a universal March 1 annual-report deadline: check the company's renewal notice and Secretary of State record for its assigned date. RCW 23.95.255 provides for dates determined by the Secretary of State.
Missing a report can lead to fees, loss of good standing, or administrative dissolution under the applicable state's rules. It does not automatically make shareholders personally liable for all company debts. Address delinquency promptly and assess the consequences under the relevant state's law.
Beneficial Ownership Information (BOI) Reporting
Under FinCEN's final rule, effective August 14, 2026, companies created in the United States are exempt from BOI reporting. The old domestic-company filing instructions should not be used as a current compliance checklist.
A foreign-country entity registered to do business in a U.S. state or tribal jurisdiction may still be a reporting company unless an exemption applies. Reporting companies do not report U.S.-person beneficial owners or U.S.-person company applicants under the final rule.
If your entity was formed outside the United States, check FinCEN's current eligibility and deadline guidance. Domestic-company relief should not be assumed to cover every foreign entity registered here.
The 83(b) Election Clock
A December transfer of substantially nonvested stock for services can start a January 83(b) election deadline. The election generally includes the transfer-date value, less the amount paid, in current compensation income instead of waiting until the stock becomes substantially vested. Evaluate the tax cost and forfeiture risk; it is not automatically beneficial in every case.
Section 83(b) generally requires filing within 30 days after the property transfer. Section 7503 applies when the last day is a Saturday, Sunday, or legal holiday. Without an election, later tax depends on the stock's value when it becomes substantially vested; higher tax is not inevitable.
Follow the current IRS filing instructions, provide required copies, and retain evidence of timely filing. Track the actual stock-transfer date; an option grant alone generally does not start an 83(b) election period.
Stock Option Grants and Board Approvals
Confirm that each option grant was validly authorized under the plan and applicable law. A board, authorized committee, or properly authorized delegate may act; Delaware Section 157 permits delegation subject to limits. Records should reflect the actual approval and grant facts. Do not backdate documents or assume later approval establishes an earlier tax grant date.
Also, every option grant agreement needs to spell out the exercise price, vesting schedule, and plan details. Sloppy option agreements create headaches in fundraising, M&A, or if you ever need to enforce the terms. January is a good time to audit your option grant files and make sure everything is documented properly.
409A Valuation Freshness
Before relying on a private-company valuation for a new option grant, confirm that it reflects material current information and is no more than 12 months old. A financing or other material development can require reassessment sooner. For the usual Section 409A stock-option exemption, the exercise price must be at least grant-date fair market value and other conditions must be met. See Treasury Regulation 1.409A-1.
An independent appraisal is one valuation safe harbor, not a universal annual filing requirement. Schedule valuation work around planned grants and material developments. Restricted stock is generally governed by Section 83; do not assume every equity award requires a separate outside 409A report.
Rule 701 Limits for the New Year
If relying on Rule 701, track both the exemption's issuance limits and its separate $10 million enhanced-disclosure threshold over the applicable consecutive 12-month period. Above that threshold, additional disclosures must reach covered investors a reasonable time before the sale. When Rule 701(e)’s enhanced-disclosure requirement applies, option recipients generally must receive the required information a reasonable time before exercise. For the RSUs described in SEC interpretation 271.24, delivery must occur a reasonable time before grant; waiting until vesting or settlement is too late. Determine other awards’ disclosure timing under the applicable rule rather than treating every derivative like an option. Keep the $10 million threshold measurement (grant-based for options) separate from disclosure-delivery timing; option exercises do not trigger that threshold. The obligation can cover earlier recipients in that period; waiting until the threshold is crossed can be too late. See our Rule 701 guide.
The calendar year does not automatically reset the analysis. Review planned awards, the counting rules, and disclosure timing before making grants or allowing exercises.
The January Checklist
Use this checklist for the obligations that apply to your company:
Confirm the reporting year and deadline for each payroll or information return; resolve worker classification questions; compare Delaware franchise-tax calculations; check each state's renewal date; assess BOI only under current rules; track 83(b) deadlines from stock transfers; reconcile option authorizations and grant records; review valuations before new grants; and monitor Rule 701 limits and disclosure timing.
Assign an owner and a calendar date to each applicable item. Keep filing receipts, approvals, valuation support, and disclosure-delivery records together so they are available for later review.
If you're not sure where you stand on any of these items, that's exactly what I'm here for. Reach out, and we can walk through your startup's specific obligations.
Want a legal foundation that doesn't leave you vulnerable? Let's talk about your startup's compliance roadmap.
This post is for educational purposes only and is not legal or tax advice. Consult a qualified attorney about your specific situation.
