- March 16, 2017
It is quite common to make mistakes in the 1099 filing procedure. There are many mistakes that the filers are found making in common when they choose to E-file 1099. Here, you will come across some mistakes in the 1099 form filing procedure. All recognized characteristics have properly been removed for protecting the filers.
How to Avoid Top 8 Mistakes in the 1099 Filing Process
Here we provided common mistakes when you are E-filing the 1099 form online.
1. Wrong Way of Filing the Corrected Form
This is one important mistake that should be taken care of when filing Form 1099 online. When filing the corrected form 1099, make sure to check the box that has been marked “CORRECTED” right at the top of the form. This mistake is being pointed out here because it is quite easy to miss checking the box.
2. Typos in Name and TIN
The IRS checks the name and the TIN against its database. When the IRS finds that the information provided on the 1099 form is not matching its records, it does not switch characters around or try several combinations of making a match. The IRS issues a CP2100A or CP2100 resulting in a penalty of up to $230 for the tax year. However, the IRS is well aware of honest mistakes and offers some methods to the filers for contesting penalties and providing information correctly. Still, it is necessary for you to double-check the name and the TIN.
3. Which Box is Correct?
When carrying out 1099 electronic filing it is necessary to know which box is right and which is wrong. Therefore, it is very important for you to take the services of an accountant who might be of good help. This is because most of the time it happens that people do not have relationships with the recipients who got the payments.
4. Your State might require 1099 Online Filing
Depending on the State where you live, your State might have a 1099 filing requirement. There are States that take information off from the federal form by way of the Combined Federal State Filing Program. The states that take the SF/CF information might require separate 1099 filing in the case of withholding. Other states might need separate filings like sending in CD-ROM, e-filing, or paper filing. Therefore, it is important for you to check with the state that you live in if you do not have any idea about the 1099 file online procedure. However, the requirement should not be ignored.
5. Are you the Payer?
The taxpayer is the one who makes the payment and the recipient or payee is the one who receives payment. Form 1099-MISC has separate columns for both. Getting them backward means having to fix them eventually with the Corrected form.
6. Missing 1099 Deadline
Remember, there is a due date for form 1099-MISC but this does not mean that you must rush with the filing procedure. Planning is very important. March 31st is the due date for 1099 forms and now plan accordingly.
7. Avoid Attempted Fraud
Any kind of unnoticed attempted fraud should be avoided as this is a mistake that the Internal Revenue Service will take steps over.
8. Slow Down
Take a good time in filing form 1099-MISC. Try to complete all the important steps by providing the correct information.
