Posted by James Financial Services Inc

Common Mistakes for Form 1099-MISC

Common Mistakes for Form 1099-MISC

Preparing 1099-MISC forms can be difficult, but we're here to make it easy! We've compiled this list to make sure you don't make these common 1099-MISC errors.

So you:

  • Have established who should receive the 1099-MISC form;

  • Obtained information on the taxpayers of your business;

  • Sent for and retrieved information on the payee via a completed W-9 form;

  • And the amounts of payments made and collected by its accounting system.

You seem like you are fit and ready to complete and submit 1099-MISC forms. However, before pressing the print or electronic file button, please take a moment to review the information and forms for accuracy to avoid potential fines or other issues.

When filling out forms, make sure you don't make these common mistakes on the 1099-MISC form:


Sending a 1099-MISC form to an employee.

Form 1099-MISC is used to report certain payments to the non-employees. A non-employee is defined as a person who is not an employee of your business, such as independent contractors, independent professionals, or third-party companies.

Employees receive Form W-2 of wages and salaries received during employment.


Omitting tax ID numbers

If you do not provide a tax identification number (TIN) on the 1099-MISC form you submitted, the reported taxpayer may be subject to withholding tax. You can ask for the recipient's TIN using a W-9 form.

You also want to verify that the recipient's TIN is correct. In addition to the signed Form W-9, you can use online tools to verify that the IRS corroborates the information provided. Also, talk to a tax professional to help you verify the information.

 

Using the wrong year form

As with all tax return forms, be sure to complete Form 1099-MISC for the correct fiscal year, that is, the year the payments were made, NOT the year you prepared the forms.


Not using the approved form.

There are several ways to purchase 1099-MISC approved paper submission forms. You can not only download Form 1099-MISC from the IRS Forms Center, copy it, print it, and send it. Copy A, sent to the IRS, uses a special red ink that a copier cannot duplicate.

You can order or purchase paper forms directly from an office store and the IRS, or you can use tax software to send electronically to the IRS and email copies to recipients or postal.


Failing to include a Transmittal form.

Form 1096 is the compilation report for the 1099 series printed reports and other returned information. An individual version of 1096 is required for each type of disclosure statement you submit. For example, if you complete the 1099-MISC and 1099-R forms, you will need to generate 1096 for the 1099-MISC forms and 1096 for the 1099-R forms.


Making general form mistake

Completing 1099-MISC forms on your own can generate simple errors, such as using too light ink, missing decimal points, entering a too large or too small character, or incorrect data formatting, such as the recipient's name.

Employing the services of a tax professional can help you avoid or reduce these simple mistakes.


FOR MORE INFORMATION ON HOW JAMES FINANCIAL SERVICES, INC. CAN BEST HELP YOU WITH YOUR TAX FILING NEEDS, PLEASE CLICK THE BLUE TAB ON THIS PAGE.


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