In most cases the 1099 statute of limitations is three years. Those three years begin on the due date of the return or the date on which it was filed – whichever is later. So, if you file your employees’ 2020 1099-misc on time, on January 31, 2021, the statute of limitations will expire on January 31, 2024. If you file late, like on August 1, 2021, the statute of limitations expires on August 1, 2024.
It is important to note that a return is considered to be filed on the due date even if it was filed a few weeks earlier. So, if you file your employees’ 2020 1099-misc on January 1, 2021, the statute of limitations will still expire on January 31, 2024.
Deadlines aside, the better solution is to avoid these mistakes in the first place. Software tools from Advanced Micro Solutions are designed to do just that.
What does the 1099 statute of limitations mean?
The 3-year 1099 statute of limitations applies to most forms issued and collected by the IRS. This period is separate from the statute of limitations period designated for collecting taxes, which can happen if the IRS files suit against the taxpay to collect. That timeline is generally 10 years.
The 1099 statute of limitations can be quite complicated. The IRS statute of limitations on actions for back taxes relies heavily on whether a tax return was ever filed in the first place. After that, the question because whether the return in question was accurate. If you’re worried you forgot to file a 1099, or if you recently caught a mistake on a 1099, you typically have three years to rectify the mistake, but this can change depending on the form.
Avoid Mistakes with a 1099 Software Tool
The 1099 statute of limitations is only important to those who either incorrectly file 1099s or neglect to file altogether. If you’re in either of these situations, we understand your position. Running a small business can be tough, and mistakes are bound to happen. If you’re looking for a way to lighten your burden, consider a 1099 software tool, like the option offered from Advanced Micro Solutions.
While our 1099/W-2 filer won’t do all of the work for you, it will mitigate a significant burden. Here are just a few features of this helpful software solution.
- A Common Payee File allows the user to select a Payee across payers/1099 forms without having to type in the same information multiple times
- Entering information is easy, and the entry screen resembles actual forms
- Data is automatically saved through the 1099 software whenever a new record or form is accessed
- Prints Tables and Worksheet Reports, along with Client Letters, Recipient Lists, and Mailing Labels
- The Table Report generates hash totals of SSNs and TINs for checking data entry accuracy
Importantly, our 1099/W-2 software seamlessly integrates with AMS Payroll , another of our popular tools. If you decide to use AMS Payroll for all your payroll-related tax and wage needs, you won’t need to worry about incorrect data. The software will calculate local, state, and federal taxes for you. All you need to do is integrate this data on 1099 forms, and you’re done.