By Robert Wood
Deep into IRS Form 1099 season, many people are watching their mailbox for those tell-tale tax forms. Each Form 1099 is important, matched to your Social Security number. That way the IRS can spew out a tax bill if you fail to report one. But should you ask for one that doesn’t arrive? We’ll come back to that question. There is more angst this year than usual, since the IRS has changed the filing date for some Forms 1099.
This year, the IRS moved up the filing date–for IRS copies going to the IRS–to January 31, for Forms 1099-MISC reporting non-employee compensation in box 7. January 31 is the normal due date for the forms to be issued to recipients. But in the past, companies issuing the form had an extra month or two thereafter to send the forms to the IRS. This year, there will be many forms sent to taxpayers and the IRS simultaneously. That means less time to catch and correct errors.
Note, though, that the old delayed filing dates remain unchanged for Forms 1099-MISC that do not report in box 7. In general, IRS Forms 1099 remind you that you earned interest, received a consulting fee, or were paid some other kind of income. There are many varieties, including 1099-INT for interest, 1099-DIV for dividends, 1099-G for tax refunds, 1099-R for pensions, and 1099-MISC for miscellaneous income. Sometimes, you even receive a Form 1099 that reports more than you received.
There are different types of Forms 1099, and some of them you might need. But what about the common Form 1099-MISC? The most common is Form 1099-MISC, which can cover just about any kind of income. Consulting income, or non-employee compensation is a big category for 1099-MISC. In fact, apart from wages, whatever you were paid in 2016, is likely to be reported on a Form 1099.
Surprisingly, many people can’t wait for them to arrive. yet in my view, asking for one can be a mistake. If you find yourself wanting a form, you obviously know about the payment you received. Just report the income. You don’t need the form. The IRS does not consider it a mismatch if you report extra income that doesn’t match a Form 1099. Only the reverse is a problem.
And in my experience, asking can backfire. If you call or write the payer asking for a Form 1099, the payer may issue it incorrectly. Alternatively, you may end up with two, the first one that you didn’t receive, and the second issued because you asked for it. The IRS may get both, and the IRS computer may think you had twice the income you did. It happens.
This article originally appeared at Forbes.com.Back to Articles Back to Robert Wood
The information provided in this article is for general information purposes only. The information is not intended to be comprehensive or to include advice on which you may rely. You should always consult a suitably qualified professional on any specific matter.
I’m a tax lawyer based in San Francisco (www.WoodLLP.com), but I handle tax matters everywhere. I enjoy untangling a tax mess from the past, disputing taxes with the government or planning taxes for the future. One of my specialties is advising about lawsuit payments. Whether you’re receiving or paying a legal settlement, you can probably improve your tax position. I write frequently about taxes, from expatriation to sales tax, from selling your company to restitution. I’ve written over 30 tax books, but my best seller is still Taxation of Damage Awards and Settlement Payments. Contact me at wood@WoodLLP.com.
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