Q:

How do you correct a 1099-MISC mistake from a previous year?

A:

Quick Answer

To correct an error on a paper-filed 1099-MISC, first determine whether it was an Error Type 1 or 2. Failure to timely report and correct errors may result in fines, says the Internal Revenue Service.

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Full Answer

An Error Type 1 is an incorrect sum, code or checked box or failure to timely file a return, says the IRS. To fix these errors, prepare a 1099-MISC form with the corrected information. Make the remainder of the form identical to the original. Mark an X in the "corrected" box at the top. Prepare Form 1096 with the appropriate information from the corrected Form 1099. File Form 1096 and copy A of Form 1099 with the appropriate service center of the IRS.

An Error Type 2 includes an incorrect TIN, a missing TIN, an incorrect name or filing of the wrong type of return, states the IRS. These errors require the completion of two new 1099s. Complete a new 1099 with all of the correct information, except make all dollar amounts zero. Mark the "corrected" box at the top of the form with an X. Prepare another 1099 with all of the correct information including the correct dollar amounts. Do not mark the "corrected" box. Prepare Form 1096 and enter the reason for filing the corrected 1099 in the bottom margin. The only accepted reasons are "Filed to Correct TIN," "Filed to Correct Name" or "Filed to Correct Return." File Form 1096 and copy A of the 1099s with the appropriate service center.

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