Here’s something else we didn’t mention earlier: With few exceptions, you have three years to file corrections. That said, you should always make these filings as soon as you identify an error. What happens after three years? The IRS will likely claim there’s a statute of limitations on claiming a refund. That said, certain employment laws pertain to business records as far back as 7 years, which is why most accounting professionals recommend maintaining tax records for this length of time.
What is the 1099 Statute of Limitations?
The 1099 statute of limitations is three years. To further clarify, those three years begin on the due date of the return, or on the date it was filed. For example, if you file your 1099 on time next year, on January 31st 2021, the statute of limitations expires on January 31, 2024.
In the simplest terms, a statute of limitations is the maximum time allowed to initiate legal proceedings. If the IRS finds anything incorrect about a 1099, or if you neglect to file one, the agency has three years to take action. In most cases, the IRS will notice a 1099 discrepancy prior to that deadline.
Remember that the 1099 statute of limitations is different from the timeline set for collecting taxes. That statute of limitations is typically 10 years. If you have questions about that, we recommend reading our guide.
Avoid Amending 1099 Corrects with a Software Tool
We know that mistakes happen, especially on a 1099. Most employers using this form are likely completing them by the dozens, which means some information may be left off.
Avoid incorrect or incomplete 1099 forms by investing in software tool. Our 1099/W-2 filer might not do all the work for you, but it will take a big load off your shoulders. If you’re not sold on the idea of using a software for 1099 preparation, we hope these features might change your mind.
- Entering information is easy, and the entry screen resembles actual forms
- Data is automatically saved through the 1099 software whenever a new record or form is accessed
- Prints Tables and Worksheet Reports, along with Client Letters, Recipient Lists, and Mailing Labels
- A Common Payee File allows the user to select a Payee across payers/1099 forms without having to type in the same information multiple times
- The Table Report generates hash totals of SSNs and TINs for checking data entry accuracy
Sure, you’ll have three years to amend any 1099 corrections you might have made. But with a software tool, you’re less likely to make those mistakes in the first place. Take our tools for a spin with our free, downloadable demo. If you have any questions, call our Sales and Information team at 800-536-1099. We’re more than happy to talk about any concerns you might have about filing 1099s.