The companies that are supposed to issue my 1099 forms are being particularly slow this filing season. I've only received five.
I'm still waiting for about double that to show up in my snail mail box (yeah, that's still happening) or as an email notice that they're available for download.
The Internal Revenue Service realizes that millions of taxpayers eagerly await these documents. The agency also is aware of the burden their issuance places on companies, particularly smaller firms.
Businesses must get the documents, notably Form W-2 wage statements and myriad 1099 forms that go to freelance, contract, and third-party income recipients, by Jan. 31. The end-of-January deadline also applies to the form copies the companies must send to the appropriate federal agencies so the information can be compared against what taxpayers enter on their tax returns.
To help the issuing companies, the IRS on Wednesday, Jan. 25, opened an online way for businesses to submit their 1099 information returns to the agency for free.
More digital ways to complete tax tasks: The new Information Returns Intake System portal, or IRIS, obviously is part of the IRS' long-term commitment to going as digital as possible.
The benefit for digital savvy companies is that they now can file these IRS-mandated 1099 documents more quickly.
But it also should help Uncle Sam's tax collector.
The IRS hopes that increased business use of the IRIS portal, which now is accepting only 2022 tax year and later 1099 forms, will reduce the millions of paper reporting forms that flood the agency annually. That then will help the IRS catch up with its lingering COVID-created paperwork backlog.
Electronic advantage for all filers: Once companies get into the habit of e-filing these information returns with the IRS, it also should help the process of getting the corresponding copies to taxpayers.
"The IRS is excited to offer any business, especially small companies, a great new way to electronically file their 1099s for free," said IRS Acting Commissioner Doug O'Donnell. "This simplifies filing for those issuing 1099s and helps recipients receive information timely."
Filers can use IRIS to create, upload, edit, and view information, and then download completed copies of 1099-series forms for distribution and verification.
The IRS says IRIS will acknowledge receipt of the e-filed 1099s within 48 hours. The portal also will automatically detect filing errors and provide alerts for missing information.
In addition, business filers can submit automatic extensions and make corrections to information returns filed through IRIS. And IRIS will retain issuer information from year to year, which should make annual e-filings easier for the companies.
IRIS eventually will replace the IRS' existing Filing Information Returns Electronically (FIRE) system. The IRS, however, is not making an immediate break. It says FIRE will remain available through at least the 2023 filing season for bulk filing of 1099 forms and the other information returns that must go out to the IRS and taxpayers.
IRIS-accepted 1099s: Businesses now can e-file the following 1099 series via IRIS.
- Form 1099-A, Acquisition or Abandonment of Secured Property
- Form 1099-B, Proceeds from Broker and Barter Exchange Transactions
- Form 1099-C, Cancellation of Debt
- Form 1099-CAP, Changes in Corporate Control and Capital Structure
- Form 1099-DIV, Dividends and Distributions
- Form 1099-G, Certain Government Payments
- Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments
- Form 1099-INT, Interest Income
- Form 1099-K, Payment Card and Third-Party Network Transactions
- Form 1099-LS, Reportable Life Insurance Sale
- Form 1099-LTC, Long-Term Care and Accelerated Death Benefits
- Form 1099-MISC, Miscellaneous Information
- Form 1099-NEC, Nonemployee Compensation
- Form 1099-OID, Original Issue Discount
- Form 1099-PATR, Taxable Distributions Received from Cooperatives
- Form 1099-Q, Payments from Qualified Education Programs (Under Section 529 and 530)
- Form 1099-QA, Distributions from ABLE Accounts
- Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
- Form 1099-S, Proceeds from Real Estate Transactions
- Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
- Form 1099-SB, Seller's Investment in Life Insurance Contract
IRIS is likely to be a major help to the IRS and payers when the new, lower 1099-K rules take effect. This year third-party payment platforms were to have issued the earnings documents when transactions reached $600.
The IRS decided to put that lower earnings threshold on hold for a year.
What about W-2 forms? The other common earnings statement mentioned at the start of this post is Form W-2. It's also necessary for taxpayers to file their tax returns.
This officially named Wage and Tax Statement, however, doesn't go directly to the IRS. It must be filed by issuers with the Social Security Administration (SSA), which then shares that info with the IRS.
The SSA also encourages all employers to e-file the government's copy of W-2 forms. In fact, in some cases it goes beyond mere suggestion.
Companies must e-file if they issue 250 or more W-2 forms or the corrected version Form W-2C. Payers that must e-file but fail to do so could incur a penalty.
You also might find these items of interest:
- 1099-K reporting delay yays and nays
- Tax filing checklist questions to answer before you file
- More tax forms, and more about them, at 2022's Talking Tax Forms and Tax Forms 2023
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