1099 Tax Software Blog

We discuss and show the due dates for all of the information returns for a calendar year. These due dates are not exact but close to the actual due date.  If the due date falls on a Saturday, Sunday or legal holiday, then the due date moves to the next business day.

January 31

By the end of January, the payer must print and mail all recipients Copy B of Forms 1097, 1098, 1099, 3921, 3922 or W-2G.  You can also e-mail Copy B to the recipient, fax it or hand it to them.  You just have to make sure that the recipient actually gets the form and data.  Sometimes emails are blocked and faxs are misplaced.  But buying stamps, postmarking the letter on or before January 31 and mailing Copy B to someone is something you can show the IRS as proof that this task was completed.

Employee copies of Form W-2 and all participant copies of Forms 5498 are also must be sent out by the end of January.

February 15

There are some Forms that are not required to be sent out by the end of January.  They include Form 1099-B, 1099-S and 1099-MISC if you are reporting payments in Boxes 8 or 14.  Copy B of these forms must be mailed by mid-February.  Oftentimes the due date is the 15th of February but sometimes the due date is the 16th or 17th.

February 28

If you are paper filing, the due date for sending Copy A along with the 1096 is the end of February.  All 1097, 1098, 1099 and W-2G records must be paper filed and sent to the IRS and all W-2’s must be sent to Social Security.

March 15

The 1042-S is due in mid-March.  Form 1042-S reports Foreign Person’s U.S. Source Income Subject to Withholding.  Every aspect of that form is due in mid-March.  Copy B must be sent (mailed, emailed, fax) to the recipient.  And you either need to paper file the 1042-S along with the 1042-T by that date or efile via the IRS FIRE website.

March 31

One benefit of efiling is that you get an extra month to file.  The IRS goes out of their way to encourage businesses to efile and they promote the service by mentioning this additional time.  If you don’t paper file by the end of February, you must efile by the end of March.  All 1097, 1098, 1099, 3921, 3922 and W-2G records must be submitted via the IRS FIRE website while all W-2’s are sent via SSA website.

April 30

If you can’t efile by the end of March, you can apply for and automatically receive a one-month time extension to efile.  If you apply for this extension online, you will automatically receive the additional time.  The extended due datefor submitting the 1099 records is April 30.

Also, all Form 5498-ESA recipient copies are due.

May 30

All 5498 and 5498-SA recipient copies must be sent by the end of May.  All 5498, 5498-ESA and 5498-SA records must be paper filed or efiled by the end of May.  You can apply online for additional time and will receive an extension to the end of June.

August 1

If you submitted any erroneous information, you have until August 1 to submit a correction.  All corrected 1097, 1098, 1099, 3921, 3922, 5498, W-2G, 1042-S and W-2 forms are due by August 1.

The IRS FIRE (Filing Information Returns Electronically) system is set up for financial institutions and others to electronically file Information Return Forms 1042-S, 1097-BTC, 1098, 1099, 3921, 3922, 5498, 8027, 8955-SSA and W-2G.

Advantages to filing your information returns electronically are:

It’s Paperless…

You are exempt from using pre-printed, red-ink forms AND there are no Form 1096 requirements. You can just print Copy B and C on plain paper with black ink or email a PDF file to all recipients.  Bulk e-delivery options are available.

It’s Efficient…

File Status results will be emailed to you within 1-2 business days. You can also login and check the file status within 1-2 business days.

It’s Flexible…

Copy A is typically due at the end of February.  If you file electronically, the due date is March 31.

Upload small or large files…

You can file electronically whether you have just one information return or millions. The IRS encourages everyone to file electronically and requires businesses with more than 250 information returns to electronically file.

For businesses that still prefer to use paper forms, you can print 1099 form copies and W-2 form copies on plain white paper. The software also prints on pre-printed 1099 forms and W-2 forms.

Filing Information Returns electronically is very cost-effective, is easier than filing on paper, and is more accurate. Filing status is available within 2 business days for Forms 1098, 1099 and W2-G and electronic filers receive a later due date for most returns.

When you file electronically, you are exempt from using pre-printed forms.  You can just print the return in regular paper or email a PDF file to all recipients.

Corrections

If you make a mistake on an information return, a correction should be filed as soon as possible. Our software will create corrected replacement files for electronic submission.  We follow the instructions on amending information returns filed electronically or magnetically, refer to Part A, section 11, of Publication 1220.

1099FIRE software at the site 1099fire.com creates original, replacement and corrected files in the format required by the IRS for electronic transmission. The system is updated each year to reflect the format changes that are made by the IRS.

You can request more time to file any information return.  Its easy to do and you will automatically receive an additional one month time extension.

Its important to remember that you can attain an automatic 30-day extension for filing Copy A by paper or electronically with the IRS (or SSA if you are filing Form W-2).  This extension option does not give you additional time to distribute Copy B to the payees. You can not request additional time for distributing Copy B.

The steps are below:

1. Log into the IRS FIRE System.  Click on Continue to reach the main menu.
2. At the main menu, click on “Extension of Time Request”.
3. You will see four (4) options.  Click on “Fill-In Extension Form”.
4. Click Continue.
5. You will see a form that asks various questions.  You select how the information returns will be filed, whether by paper or electronically.  You select which types of returns you are requesting more time to file.  The return types include W-2, 1098/1099/W-2G, 5498, 5498-SA, 5498-ESA, 1042-S and 8027.

While the W-2 is filed with SSA, you can select a time extension through the IRS FIRE System.

You also type in the payer TIN, name, address, city, state, zip code, contact name, phone number and transmitter control code (if applicable).  If you dont have a TCC number, you can leave that box blank.  You also select whether this payer address is in a foreign country.  If you select no (which is the default), then the payer resides in the United States.

Click Submit and a 30-day time extension will automatically be granted.

We can efile a 1-month extension on your behalf.  We do charge for that service.  Just contact sales at (480) 460-9311 and they can file that extension for you.

There exists a 1-step and a 2-step corrections which depends on the nature of the error.

It is important to first differentiate between a correction and omission.  If you submitted a file and it is processed by IRS/ECC-MTB, and you later discover that certain information returns were omitted or left out from the original file, then you need to create a separate file with the omitted returns and resubmit.  If you submitted a file and it was processed by IRS/ECC-MTB, and you later realize that the file has erroneous, then you need to file a correction of just those records.

If the dollar amounts or address are incorrect and/or a return was filed when one should not have been filed, the correction is a one-step process. Simply prepare a new information return and enter an “X” in the Corrected box at the top of the form. Enter the payer, recipient and account number information exactly as it appeared on the original incorrect return. Enter all correct money amounts in the correct boxes as they should have appeared on the original return and enter the recipient’s correct address. If a return should not have been filed, enter “0” (zero) for all dollar amounts. Submit the corrected returns with an Annual Summary and Transmittal of U.S. Information Returns (Form 1096).

If the recipient’s identification number was incorrect or missing when originally filed or the recipient’s name was wrong, correcting these errors is a two-step process. First, prepare a new information return with the payer, recipient and account number information exactly as it appeared on the original incorrect return and enter “0” (zero) for all the dollar amounts. Enter an “X” in the Corrected box at the top of the form. The second step is to prepare another new information return with all the correct information. DO NOT enter an “X” in the Corrected box on this return. Submit both returns to the appropriate service center accompanied by a completed Form 1096. Enter the words “Filed to Correct TIN, Name and/or Address” in the bottom margin of the form.

If the original information return was filed using the wrong type of return, follow the two-step procedure above with one exception. Enter the words “Filed to Correct Document Type” in the bottom margin of the Form 1096.

You want to file form 1097, 1098, 1099, 5498 and/or W-2G electronically to the IRS.  Smart thinking.  E-filing is easy to setup, the system double checks your file and lets you know that the file is being processed by the Internal Revenue Service.

The IRS encourages businesses to file information returns electronically.

Your first step is to attain a Transmitter Control Code or TCC number. A TCC number is a five-character number that typically consists of 2 digits, then 1 letter, then 2 more digits. To get a TCC number assigned to your business, download, fill out and submit Form 4419, Application for Filing Information Returns Electronically (FIRE). There are a few subtle details embedded in Form 4419:

1. Only businesses with a Employer Identification Number (EIN) can apply for a TCC number. Individuals with a SSN number can not apply. In the past, individuals could apply for a TCC number and transmit on behalf of others but that option is no longer allowed.

2. You select on Form 4419 which information returns you want to file electronically. One TCC number will give you authorization to efile any Forms 1097, 1098, 1099, 3921, 3922, 5498 and W-2G. But the TCC number you attain for efiling the 1099 forms will not let you efile 1042-S or Form 8027 or 8955-SSA. You need a separate TCC to efile IRS Form 1042-S, another separate TCC number to efile Form 8027 and another unique TCC number to efile IRS Form 8955-SSA.

Form 4419 must be signed and dated by an official of the company or organization requesting the TCC number. The quickest way to submit Form 4419 is by fax and a toll-free fax number is shown on the form. You can also mail Form 4419 and the mailing address is also shown on the form. But I recommend faxing rather than mailing. I also recommend not mailing AND faxing. Either mail in Form 4419 or fax it, but don’t mail and fax in the hopes of getting a TCC number quicker. If you do both, it will confuse the IRS and there will be delay in getting the TCC number. Or worse, you have two TCC numbers and the IRS will call and ask you why your not using one of the TCC numbers.

When its tax season and the IRS is busy, it usually takes about 7 days to get a TCC number by fax and at least 30 days to attain a TCC number if you mailed in Form 4419.

Once a TCC number is assigned to your business, you can go to the site http://fire.irs.gov and click on Create a New Account.

You have a file which contains a set of records for an information return.  You submitted that to the IRS FIRE System.  The IRS will email you whether the file is Good or Bad if you provided a correct e-mail address when you set up your account.

You can patiently wait.  Typically it takes 1-2 days before you get a response back for a 1099 information.  The 1042-S, 8027 and IRS Form 8955-SSA takes anywhere from 5-7 days.  Sometimes waiting for an email response from the IRS is too much. You can log in and check your File Status at any time of the day or night.  The steps for checking the file status are as follows:

Log in the http://fire.irs.gov

Click to get to the Main Menu.  Then click on Check File Status.  Enter your TCC and TIN.  Then click on Search.

If the results indicate:

“Good, Not Released” – If the payee count is also correct, then you (the filer) are finished with this file. The file will be released after 10 calendar days.  If, within this 10 day timeframe, you find out that made any errors with this file, you can always call the IRS and ask them to delete the file. The phone number for the IRS FIRE System is toll-free 866-455-7438.  They are open Monday through Friday from 8:30am to 4:30pm EST.

One common mistake that I make every year is submitting the same file twice.  I click the submit button and then accidently hit submit again and the same file is submitted twice.  I can easily call the IRS and ask them to delete one of the files, but I have to call within that 10 day period of time.

“Good, Released” – The file has been released.  You won’t receive an email notification of when the file was released.

“Bad” – The file has errors and a replacement file needs to be submitted.  The good news is, click on the filename and you can view the error messages associated with this file.

“Not yet processed” – The file was submitted and received but no results are available right now.  You just have to wait.

When you are finished checking the file status, just click on Log Out and the close your web browser.

Typically it takes 1-3 days before you get an email with the file results.  But when your getting close to deadline, the IRS Fire System tends to slow and may take many days to a week before you see any results. Being able to check the file status is a nice feature.

There are four types of files that you submit to the IRS FIRE; a test, original, replacement and amended or corrected file.

Test

Testing season lasts from November 1 to February 15.  You are not required to submit a test file, but testing is a great way to get some experience with the electronic filing process for information returns.

Original

An original file is an information return that has never been reported.

Replacement

If you file something and it comes back as BAD, then log into the IRS FIRE System and at the Main Menu, you can check the File Status as follows:

1. Click on “Check File Status”.
2. Enter your TCC.
3. Enter you EIN.
4. Click “Search”.

Click on the file that is BAD to reveal the errors associated with that file. Correct those errors and submit a replacement file. Continue filing a “replacement” file until it comes back as GOOD and do so within the deadline due dates.  When you are electronically submitting a replacement file, you have the option to select which file you want to replace.

Correction

If you file something and it comes back as GOOD, then the file has been processed.  Let’s say later you discover that some of the records contained erroneous data.  You may have
transmitted a missing or incorrect TIN, payee name or address, the amounts or amount codes may have been wrong or other common errors. Then you need to submit a corrected file which contains just the records that need to be amended. If you filed 400 1099-MISC records and found out later that 25 of those records contained erroneous data, then you need to put together a corrected file of just those 25 records and submit.

If your corrected file is BAD, correct the file and resubmit as a replacement, not another correction.

File Status

If the file status indicates:

“Not yet processed”.  Then you just need to wait and check back in a few days.  Typically, a file will be reviewed within 1-2 days, but as deadlines approach, the IRS FIRE system tends to get bogged down and there may be delays in processing a file.  Some files such as the 8955-SSA or IRS Form 8027 take up to 5-7 days to process.

If the file status indicates “Good, Not Released” and you agree with the “Count of Payees”, then you are finished with this file. The file with be automatically released after 10 calendar days.

“Good, Released”. Then the file has been released to the IRS for processing.

You submitted a file to the IRS FIRE System.  The file contained data about a specific information return.

The file came back as BAD.  In this case, you need to submit a replacement file.  If you submit the replacement file and that file as well is BAD, then you want to submit another replacement file and just keep submitting replacement files until you get a GOOD file status.  You can log into the IRS FIRE System, click on Check File Status, click on the BAD file and you will see the error messages associated with this file.  Visit 1099fire.com and the site lists the errors associated with 1099, 1042-S, 8027 and 8955-SSA file submission.

A correction, in contrast, is when you submit a file and it comes back as GOOD.  But later you find out that the datafile that you submitted contains erroneous information.  In this situation, you need to put submit a corrected datafile.

If you find out that the data file contains errorneous information within the 10-12 days after you submitted your file, then call the IRS and ask them to delete the file.  Submitting a file and getting a file status of GOOD means that the file is GOOD but not released.  It takes anywhere from 10 to 12 days before your data file is released.  If you call the IRS within that 10-12 day window, you can ask them to delete the file and they will.  You then submit a new original file with the correct data.  IRS FIRE help can be reached toll-free 866-455-7438.

There are two types of corrections, a one-step and a two-step correction.  A one-step correction applies when you have new payment amounts for the payee or recepient.  A two-step correction applies when the original file you submitted had a missing or incorrect TIN for the payee, an incorrect payee name or the wrong type of return was indicated.  In this two-step case, you first create a file which blanks out the original file and money amounts.  You then submit a 2nd file which has the correct information.

You want to prepare and submit a correction as soon as you find out that you submitted erroneous data.  The IRS FIRE System is open most the year.