Why the 1099 Tax Form is Important
The 1099 tax form is important because it is used to report numerous types of income that isn’t related to employment, and this income must be accurately reported when filing your income tax return. There are many different types of 1099 forms, and the 1099 forms that you will receive will depend on the type of income you earned.
Whether you’re a gig worker, you received interest on a bank account, or you were paid funds from the federal government like unemployment insurance, you will receive a 1099 form. However, the 1099 tax form will be different depending on the reason you’re receiving one. For instance, if you received unemployment insurance, you would receive a 1099-G, and if you received royalties from the sales of a book you sold, then you will receive a 1099-MISC.
If you fail to file your 1099 forms with your income tax return, you will receive a letter from the IRS stating what you owe taxes, including fees and penalties. The companies who provide you with the 1099 forms have already reported the income to the IRS, so it’s your responsibility to ensure that you file the form in order to pay the taxes that you owe. When filing your 1099 form, be sure to refrain from making any of the most common mistakes, which could really spell trouble for you.
Common Mistakes You Can Make When Filing
There are many common mistakes that taxpayers make when filing their income tax returns that include 1099 forms. Since there are so many different types of 1099 forms, this can be confusing for many taxpayers. One of the most common mistakes that taxpayers with 1099 forms make is failing to file their 1099 forms with their income tax returns.
Even if you don’t receive a 1099 form and you know you earned money from a non-employment source, then you need to report that income. It is your responsibility to contact the individual or agency that paid you money and request a 1099 form if one wasn’t provided for you. If your efforts are unsuccessful, then you still need to claim the money that you earned on your income tax return, which is why keeping sufficient records is essential.
If you’re filing your income tax return with income that should have been on a missing 1099 form, you will most likely file this income under ” miscellaneous earnings.” If you’re confused or the process becomes too complicated, there are always professionals available that can complete your tax forms for you to save you the trouble and stress. The worst thing for you to do is fail to file or file inaccurate information because you don’t want to pay a professional.
Another common mistake when filing a 1099 form is failing to file by the due date. The IRS always provides sufficient time for taxpayers to file their taxes, so even if you’re extremely busy and lack a lot of extra time, you still need to take the time to file your tax forms in a timely manner. Filing late could cause you to end up unnecessarily owing late fees and penalties.
Yet another common error the taxpayers make when filing their 1099 forms is filling out the form incorrectly. Be sure to double check all your forms and everything that you’re completing on your tax forms, because you don’t want to be penalized in any way for making a mistake.
Some taxpayers mistakenly put the wrong TIN, or tax identification number, on their income tax returns. This can cause delays in processing your return until the correction is made. If you filed electronically, then you can’t fix the error on paper. You must correct the error in the same manner in which you filed initially.
Failure to write legibly on tax forms is another common mistake that taxpayers make when filing their income tax returns. These tax forms must be written legibly and in dark ink so the machines that the IRS use can easily scan them. IRS agents do not process these forms by hand, but even if they did, they would need to be able to easily read your forms.
If possible, it’s best to complete your taxes on a computer so you can type everything in and then print it. If that isn’t possible, then ensure that you write clearly and with blue or black ink if you don’t want any delays in the processing of your income tax return. Taxpayers have had their taxes returned to them unprocessed due to being illegible, so don’t let this happen to you.
How You Can Find a 1099 Filing Service
It can be difficult to find a reputable 1099 filing service that you can trust. With so many tax preparation companies popping up in various neighborhoods and online, it can be difficult to weed out the novices who could cause tax trouble for you and the experts who will maximize your tax return. You need to do your homework and thoroughly check out 1099 filing services before choosing one.
When choosing the best company, be sure to choose one that has a proven background, positive reviews, and one that has been in business for a reasonable amount of time.
Tab Service Company provides numerous services, including 1099 filing services and more. Instead of taking a chance on making a major mistake when filing your 1099, why not allow Tab Service Company to provide you with assistance? Not only has Tab Service Company been in business since 1960, but over the years they have continually provided exemplary service to all their clients. So, instead of stressing over the filing of your tax forms, allow this experienced and professional agency to file them for you. Not only will they ensure everything is filed in a quick and efficient manner, but they will keep you updated every step of the way.