The eFiled forms have been submitted, the vendor copies have been delivered, and you’re ready to put the 2017 filing season behind you. But then a vendor comes to you, and says that their SSN is listed incorrectly on their 1099.
What do you do? Do you have to make a correction to the return? How, and when do you do this?
We receive lots of questions about corrections at this time of year. The dust from filing season is starting to settle, and our filers turn their minds to finishing out the filing process for the year. Corrections are a vital part of this process.
Many of you will use our live chat feature to ask if you have to file a corrected form for a vendor name misspelling, or an incorrect TIN. The answer is yes – absolutely, that information should be corrected as soon as possible. Corrected forms also must be filed to reflect accurate dollar amounts in the boxes of a form.
There is a grey area when it comes to vendor addresses. The IRS does not require a corrected form to be filed for changes to a vendor’s address at this time. However, if the vendor requests that a correction be made to their address, best practice is to comply with the request.
Let’s take a look at some common errors on forms, and how to correct those errors with the IRS.
Say you have been alerted to incorrect vendor information. A vendor sends you an email, and says, “My legal name is Joe Doe, not John Doe.” What do you do?
This is a Type II correction, so titled because it will require two steps from your side to correct the error. First, you’ll need to void the form for John Doe. You need to do this because your vendor is sending in their information to the IRS under the name Joe Doe, and it won’t match with the form you submitted. You need to cancel, in effect, the form for John Doe, so that it is not floating around without a match.
This is also important in the event that your company is audited. You submitted a form for John Doe, in the amount of $1,000. If you then submit a form for Joe Doe with $1,000, without voiding the original form, the IRS will see $2,000 in your payer’s name, when they should only see $1,000.
How do you void a form? First, log in to your Tax1099 account. Then, navigate to Forms > New Form. Select 2017, then the same type of form as you originally filed. Enter the vendor information as you originally submitted it. In the case of this example, you would enter John Doe, and the original TIN. In the box numbers, enter zero’s.
Be sure to check the box that says “Corrected” at the top of the form. Then, press next to submit and pay for the form.
Now that you’ve voided the first form, you’ll create and file a fresh form. Return to Forms > New Form, select 2017, and the form type you want to file. Enter the true vendor information and box amounts, and submit the form as an original. There’s no need to select corrected on this form, as it’s the first time you’re sending in information for Joe Doe.
The same process should be followed if you filed with an incorrect TIN, if a vendor requests that you correct their address, or if you filed the wrong type of form.
If the error involved nothing more than an incorrect box amount, this is a Type I correction. Fixing this error is simple, and only involves one step.
Since the vendor information you originally filed is correct, all you’ll need to do is update the box amount you submitted for the vendor. Go to Forms > New Form, select 2017. Select the same type of form as you originally filed, and enter the vendor information as you did on the original form. Then, update the amount boxes to reflect the accurate payments. Make sure that you check the corrected box at the top of the page before you submit and pay for the form.
We hope these correction reminders help you, as you wrap up your 2017 filing season. If you’d like more details on corrections and corrected forms, please visit our Knowledge Base. As always, if you have any questions for us, please contact us by live chat on our website.