How to correct a 1099 mistake

February 11, 2013

Now that tax season is well underway, 1099 and W-2 recipients will be receiving the appropriate tax forms, since most were required to be post-marked by January 31.  However, as with any situation, there are always potential mistakes when it comes to these forms, and two tax experts explain how to correct a 1099 form.

First of all, for those that are expecting to receive a W-2 form and didn’t, ask your employer, but only after Valentine’s Day. For those expecting to receive an 1099 form, on the other hand, don’t ask. “Although most Forms 1099 arrive in January, some companies issue the forms throughout the year when they issue checks,” tax lawyer Robert Wood explains in a Forbes article. “Whenever they come, don’t ignore them. Information reporting has become the centerpiece of IRS enforcement efforts. Each form includes your Social Security number. If you don’t include the reported item on your tax return, bells go off.”

Instead, report your income, since it’s only when not enough income is reported that it become an issue, not when too much is reported. The reason behind this is that if you ask for a 1099 form, the issuer may make a mistake or have already issued one, meaning it looks like you have double the income you do.

If you find a mistake on a 1099 form, such as a different amount that you were paid, contact your employer. If they haven’t sent the form to the IRS, they can issue a new form, as well as give you a letter describing what they did just in case it was sent to the IRS. Since paper forms are required to be sent by the end of February, those filed electronically with a 1099 processing service by April 1.

If the incorrect version was already sent to the IRS, ask for a corrected 1099 form to notify the IRS.

Tab Service Company is a leading provider of 1099 processing services. As an SOC2-approved service organization, we apply industry-best practices to our approach with clients.