Oh No! 1099 errors! What do we do??

Feb 13, 2014

A common scenario:

A business owner receives (from their accountant) the completed 1099 MISC forms, as well as, the 1096 Transmittal form to be submitted to the government with Copy A of each 1099. They quickly distribute the 1099’s to the intended recipients and promptly mail the red copy 1096/1099’s, which isn’t due to the government until February 28, 2014 (for the 2013 tax year).

Within 24 hours the employer receives a call that either the SSN, name or amount is incorrect on a 1099. The employer calls the accountant with the dreaded, “ what do we do? I already mailed the red copy 1096 to the IRS!” Have no fear – a relatively easy fix!

A new 1099 MISC must be created using the CORRECTED information with the “corrected” box checked at the top of the form. Also a new 1096 using the correct amount of just that corrected 1099 must also be completed. You should enter a date next to the “CORRECTED” checkbox on the recipient’s 1099. This will help them in the case of multiple corrections.

File Form 1096 and Copy A of the return with the appropriate service center. This is based on your home state for the business. The various centers are listed on the front and back of the 1096. Do not include a copy of the original return that was filed incorrectly.

Time saving and money saving tips: A great practice is to disburse your recipient copies (must be done by January 31st) then wait a week or two before mailing the red copy 1096/1099 to the Internal Revenue Service which is due February 28th. This allows time for the recipients to check the information and for the employer to make necessary changes before submitting the official IRS copies yet still being mindful of due dates.

This also works great for employee W-2’s and the red government copies with the W-3 transmittals.

By: Tammy Scheuermann, Accountant

Categories: Uncategorized