It is natural to wonder: Is there a penalty for filing a corrected 1099 form? No software can prevent human errors on tax forms. Certain programs help reduce the risk of making redundant mistakes. Submitting any form with consistent errors may lead to the IRS issuing penalties. Your business will likely encounter penalties for submitting corrected forms. It is still better to address any mistakes sooner rather than later. Waiting for a longer period increases the chance of high fines or more severe penalties for your company.
Advanced Micro Solutions supports small businesses. Users can generate many 1099s, W-2s, and related forms. Our software can help you prepare to file any corrected form. Our W-2/1099 Forms Filer minimizes the risk of making mistakes. Our easy-to-use, menu-driven format saves people time and money rather than wondering is there a penalty for filing a corrected 1099 form.
Penalties for Correcting a 1099 Form
All businesses must submit a corrected 1099 form if they make an error on their original form. The IRS will issue some penalty depending on the type of error and whether it was intentional. A business generally must pay $100 per incident. The business may also pay a separate $100 fee after the IRS sends a statement to any taxpayer who received an incorrect tax form.
Keep in mind that submitting a form with the wrong information is not the only type of error. Any business that misses a tax deadline will incur a penalty. The IRS will charge $60 for information returns or payment statements up to 30 days late that are due in 2024. There is no maximum penalty for businesses that intentionally disregard filing deadlines.
Is There a Penalty for Filing a Corrected 1099?: How to Amend
It is not unusual to discover a mistake after you filed your 1099 forms. Employers will sometimes even make errors because contractors included the wrong information on their Form W-9. Fix any of your forms in a timely fashion. Simply fill out an accurate Form 1099 and include it with a Form 1096 if you mail it. Put a checkmark at the top of the new 1099 form in the “corrected” box. Do not include a copy of your original Form 1099. Save even more time and amend any of your errors when you choose e-filing as your filing method.
Understand the different ways to amend inaccurate Form 1099s based on the IRS’ Type 1 and 2 categories. Knowing the extent of an error will tell you the severity of the penalty for filing a corrected 1099 form.
Type 1 Errors – The first type of error includes reporting incorrect money amounts, any wrong codes or checkboxes, or mistakenly filing a return. Prepare a new 1099-NEC form and check off the “corrected” box. Record the accurate information and anything else that was on the previous form. Include a new Form 1096 with all of the accurate information if you mail an amended form. Otherwise e-file just your new Form 1099 using tax preparation software.
Type 2 Errors – The second error classification is if a business omits the Taxpayer Identification Number. A business may also input the wrong information, such as the wrong payer name or a wrong payee TIN. The first step of the process is the same as Type 1 regardless of how much is there a penalty for filing a corrected 1099 form. Input next the payer, recipient, and the account number details as entered on the original wrong form. Enter the correct information and then put zero for all of the money figures. Put “filed to correct SSN” or “filed to correct name” at the top of any Form 1096s. Mail the corrected forms to the IRS and any other specified departments. Give the corrected Form 1099-NECs to the appropriate independent contractors.
AMS Solutions for 1099 Accuracy
Reduce any frequent 1099 filing mistakes with Advanced Micro Solutions. Our software lets all users input data onto entry screens that resemble 1099 forms. Software cannot prevent all tax filing mistakes. Yet we equipped our program with a Default command. Users “define” default values for any form, like a State Code and ID. AMS has an SSN verification file. Verify workers’ Social Security numbers with the SSA.
Avoid spending too long wondering is there a penalty for filing a corrected 1099 form. Try finding solutions to avoid filing corrected forms or make that process quicker. Schedule a free software demo to learn how our system works or call us directly at 1-(800)-536-1099 with questions.