The most important reason to have correct ID information is to avoid potentially high penalties. The current penalties are $100 for every 1099 or W-2 that has a missing or incorrect TIN or SSN.
However, you can reduce the penalty to $30 if you file the correct information within 30 days of the due date or to $60 if the correct information is filed by August 1st.
You can also avoid the penalty completely if you have a small number of errors that are corrected no later than August 1st. That small number is currently the larger of ten returns or 1.5% of the total returns submitted.
The penalty can also be waived completely for 1099s if the recipient refuses to provide a valid TIN after you have requested it.
Fortunately the IRS provides a TIN Matching Service for 1099s. Information about this service can be found from the IRS.
The SSA provides a similar service for W-2s. You can find information about their service at the SSA’s website.
Advanced Micro Solutions’ 1099-Etc has both TIN and SSN matching built into our W-2/1099 Forms Filer and our AMS Payroll software to help eliminate these costly errors. All that you need to do is create a file and upload it to the appropriate agency for verification.
We offer a risk free DEMO to help you determine if our software will fit your needs. We provide free live support via phone, email, fax, or chat Monday – Friday from 8AM – 6PM with extended hours including Saturdays in January and April.
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