Monday, 28 December 2015

Mistakes That Need to be Avoided When Filing Federal 1099 Form

It is form 1099 season again and there are tax payers looking for the correct steps on how to file form 1099? If you happen to be in business, then it is necessary for you to pay good attention to the issuance of these forms and failing to do so will have you facing penalties. This burden on businesses seems to grow every year. There are even cost basis required on some 1099 forms these days. However, the real award is receiving the federal 1099 form. Since the IRS receives a copy of this form, it serves as an important piece of information that needs to be handled carefully as it can cost big for an individual. There are a lot of people who do not like these forms but there are some important mistakes that need to be avoided when filing these forms.

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Do not Forget to Check Your Mail

There are a lot of people who take care about the W-2 forms because they are attached to their tax returns highlighting wages and the taxes withheld. However, people tend to be very careless about form 1099. This is something that needs to be avoided. Each 1099 form should be watched out for. This is because these forms are matched to the Social Security Number of an individual and an individual is guaranteed an audit if he or she fails to report these forms.

Do Not Forget About Address Changes

In spite of the fact that the issuer of the form possesses an individual’s old address, information gets delivered to the IRS depending on the Social Security Number of an individual. Therefore, it is important for people to make sure that their correct addresses have been provided so that they can receive a copy of these forms easily and conveniently. Address changes need to be updated directly with the payers along with putting a forward order with the US Post Office. It is important for you to see every form that the IRS sees.

Beware of Errors

Deadline for filing federal 1099 form is 31st January each year. The payer; however, has time till the end of February to send the copies of the form to the IRS. There are many payers who send the forms to the taxpayers and even to the IRS simultaneously. However, there are others who make use of a delay of 30 days. This delay actually means that the tax payer has got chances of correcting certain errors in the form. It is necessary for the tax payers to go through the forms immediately instead of just piling them up.

Do Not Lose the Forms

As soon as the form is received, it needs to be opened and checked. The forms need to be kept in a safe place because they might be required while doing tax returns. Some individual take the services of a tax preparer and in this case they need to provide copies of each form that they receive to the tax return preparers. This is how to file form 1099.

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