When you've got miscellaneous income more than $600, the Internal Revenue Service does want it reflected in your annual taxes. Under most circumstances, the client that paid you will send you a 1099-MISC that shows the exact taxable figures. If you find a mistake in this form, no matter what year it's from, you must follow the exact IRS procedures to correct it and soon. The IRS demands taxpayers correct errors as soon as possible.
Check the IRS General Instructions for Certain Information Returns to determine what type of error you are fixing. The IRS defines “Error Type 1” as either an incorrect money figure, code or checkbox or an incorrect payee name. “Error Type 2” errors are mistakes in the Taxpayer Identification Number. Taxpayer Identification Numbers can be Social Security numbers, Employer Identification numbers, Qualified Intermediary Employer Identification numbers or Individual Taxpayer Identification numbers. Possible mistakes could be a missing number, an incorrect number, name or address.
Prepare a new 1099-MISC with the correct information to fix an Error Type 1 mistake. Place an “X” in the box labeled “corrected” at the top of the form. Place the new information -- such as a corrected money amount or code -- in the form. Complete the remaining boxes with your federal identification number, the recipient's identification number and the recipient's name and address.
Prepare new separate returns to correct an Error Type 2 mistake. For one form, place an “X” in the box labeled “corrected” at the top of the form. Enter the payer, recipient and account number just as it was on the wrong form. Enter zeros for any money amounts. Don't put an "X" on "corrected" box on the second form. Fill in every blank as a completely new form with the correct information in each space.
Complete transmittal Form 1096 to send with the new 1099-MISC form(s). Enter “Filed to Correct TIN,” “Filed to Correct Name and Address,” or “Filed to Correct Return” along the bottom edge. Sign and date the form.
Check the “where to file” information with the Form 1096 for the mailing address for the corrected forms. Place them in an envelope but don't staple them together. Address the envelope with the correct address and mail the 1099-MISC corrections to the IRS.
- It's not mandatory to add a date to the corrected form, but it may help if you're dealing with multiple files. If you do, the field is near the "corrected" checkbox.