Avoid These Common Errors for Form 1099

Preparing Forms 1099 can be challenging, but we’re here to make it easier! We’ve compiled this list to help ensure that you avoid these common errors for Form 1099.

Common Errors for Form 1099

Bbefore you finalize things, take a moment to review your forms for accuracy to avoid potential penalties or other problems. When completing your forms, ensure that you don’t make these common errors for Form 1099:

Incorrect or Missing Taxpayer Identification Number

All Forms 1099 must include a TIN for the Payer and the Recipient. It’s essential to check that the TINs provided are accurate. Not providing a TIN, or providing an invalid TIN, can result in notices and/or penalties from the IRS.

A good strategy for addressing TIN validation issues is to identify them before you submit your filing(s) to the IRS. Using a TIN validation tool, like TINCorrect, is beneficial in double-checking the information against IRS records prior to filing and avoiding potential errors for Form 1099.

Using the Wrong Year for the Forms

Form 1099 is a tax-year specific form, so it’s important to ensure that you’re using the correct form year when filing.

Not Using Approved Forms (Paper Filing Only)

When paper filing, you must use the IRS approved copies that use a special red ink. They cannot be duplicated by a copy machine, and you cannot simply print off forms form the IRS website. You can order or purchase paper forms directly from the IRS, or you can skip paper filing altogether and use an IRS authorized tax filer, such as BoomTax, to electronically file.

Failing to Include a Transmittal Form 1096 (Paper Filing Only)

A Form 1096 must be included with every Form 1099 filing when submitted via mail (paper filing). A transmittal must be included with each type of information return submitted by a filer. For example, if the filer needs to submit filings for both Forms 1099-R and 1099-NEC, then they should include a Form 1096 for each filing. These should also be submitted to the IRS in their own envelopes.

It’s also important to note that paper filing is not an option for many filers. Learn more about this here.

Not E-filing When Required

For many filers, electronic filing is a requirement. Since January 1, 2024, filers with a total of more than 10 forms are required to e-file. Failing to file electronically could lead to significant penalties.

Making General Errors for Form 1099

Completing the 1099 forms on your own could result in simple errors such as using ink that is too light, forgetting decimal points, inserting font that is too large or too small, or incorrectly formatted data such as the payee name. These types of errors for Form 1099 are very common in DIY filing. Using tax software such as BoomTax could help avoid or minimize such simple errors for Form 1099.

Key Takeaway

Before submitting your forms, double-check each entry for accuracy, confirm that all TINs are valid, and ensure that you’re using the correct form for the applicable tax year. Remember, electronic filing may be mandatory depending on the number of total forms you are submitting, and failing to comply with e-filing rules can lead to penalties.

It’s detrimental to double-check all data that is to be filed with the IRS. This helps to prevent penalties and added stress of corrections. And as always, stay on top of deadlines to ensure that your filings are completed in a timely manner.

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