Figuring out how to amend 1099-MISC forms is a common challenge of running a small business, but some corrections are a lot easier to fix than others. That’s because Form 1099-MISC has dozens of commercial applications and is used by individual contractors, small businesses, and larger firms alike. If you’re a home improvement contractor or an online marketing expert, you may be in business for yourself and yet use a handful of subcontractors throughout the year to keep up with peak times and/or larger contracts. This is a popular reason for people to use 1099-MISC.
To save on business costs, individual proprietors working with tight margins may end up doing their own accounting and employer-based filing forms. That said, even professional bookkeepers and accounting departments can make mistakes. You might have made a typo or miscalculation, or you could have filed the wrong form altogether.
Maybe you filed a 1099 instead of a W-2 because you misunderstood how to classify a household employee. Maybe you filed both – employees can receive a W-2 and 1099 in some circumstances. Perhaps you were confused about the rental income earned on a property that you managed for someone until they sold it in the middle of a lease. Even the IRS admits, “The current tax code is too complicated…. Taxpayers who want to comply with the tax code often make unintentional errors on their returns, as they struggle to understand complicated rules and forms.”
FAQS for How to Amend 1099-MISC Forms
We have a page dedicated to what to expect when filing a corrected 1099-MISC Form, but we know many employers and payers have situation-specific questions. That makes sense; 1099-MISC can be a very specific process depending on your business and circumstances. Here are a few common yet specific questions about this tricky form.
- How to Amend a Handwritten 1099-MISC: One situation that comes up a lot is the business owner who fills out a form by hand, but then messes up the information or penmanship on one part of the form. What’s the best fix here? You can use white out, so long as the resulting correction is clearly legible. If there’s any question in your mind, you should prepare a new form from scratch. According to the IRS, “Although handwritten forms are acceptable, they must be completely legible and accurate to avoid processing errors. Handwritten forms often result in name/TIN mismatches. Use block print, not script characters.”
- How to Amend 1099-MISC Before Filing: One of the subtle ways in which amending Form 1099-MISC is a little different is that it’s more likely that the form was issued to the payee/subcontractor but hasn’t been filed with the IRS yet. Many independent businesses that use subcontractors will try to get their 1099-MISC forms issued as soon as possible to help their subcontractors better prepare for their own self-employed tax liability. So here’s the good news: The fix to the problem should be as easy as hustling to get the new, correct version of the form ready and filed by the Jan 31st There is one catch, however: It’s important that you have the payee/subcontractor destroy the original form with the wrong information. Essentially, the danger here is that the payee uses the original form to file their tax returns and then claims to know nothing about the new form. (Bonus Tip: If you notice the mistake truly at the last-minute, it’s usually best to apply for an extension, but be sure not to miss the filing deadline altogether.)
- How to Amend 1099-MISC After Filing: First, determine what information is inaccurate and what the correct information should be. You’ve probably done this already. There are three different scenarios:
- The easiest errors to fix deal with an incorrect payer TIN, name, and/or address. Simply write a letter to the IRS including certain information. You can find this information and the correct IRS mailing address here by searching for “Error in Reporting the Payer.”
- If the amended 1099-MISC form is only going to change a) incorrect dollar amounts, B) an incorrect address OR incorrect payee name, or C) the filing wasn’t required in the first place, then you can follow our instructions for what’s called Error Type 1. You’ll also need to prepare a new 1096 form.
- If, instead, the amended information pertains to A) an incorrect payee TIN, B) incorrect payee name AND address, or C) the information needs to be filed using a different form, then you’ll need to pursue a two-step process for fixing Error Type 2. First, you’ll need to fill out new forms with the same information as the incorrect forms except that you’ll indicate it’s a “CORRECTED” form you’ll enter “0” for all dollar amounts. Next, prepare the forms again as though they were the original copies, and this time enter the correct information. You’ll also need to prepare a new 1096 form. Find all the information you need here by searching for “two-transaction correction.”
Remember that the best way to amend 1099-MISC forms is to avoid the mistake in the first place. An easy way to do that is to invest in a reliable and user-friendly software product. While we can’t promise an immaculate form-filing process, we’ll give you the support and guidance you need to get your 1099-MISC form in shape.