What IRS Form 1096 (2016) Is For
Form 1096 serves as the annual summary and transmittal document for paper-filed information returns sent to the Internal Revenue Service (IRS). It functions as a cover sheet that consolidates totals from accompanying forms, such as Form 1099, Form 1098, Form 3921, and Form W-2G. Small business owners, independent contractors, and sole proprietors filing paper forms use it to report the total number of forms, federal income tax withheld, and total amounts of payments for the 2016 tax year. This form helps ensure the IRS accurately matches reported payments with recipients’ tax returns and maintains compliance with federal filing requirements.
If you are unable to pay your full tax liability when filing, consider exploring payment plan options for tax filings.
When You’d Use IRS Form 1096 (2016)
You will need to file Form 1096 when transmitting paper returns for the 2016 tax year.
- Regular filing: You must file Form 1096 to summarize information returns that report non-employee compensation, miscellaneous income, or gambling winnings paid to individuals during the tax year.
- Late Filing: If you miss the deadline, you should file as soon as possible. You may use Form 8809 to request a 30-day extension before the original due date for your paper filing.
- Amended returns: You must prepare a new Form 1096 to transmit corrected information returns if the original submission contained incorrect amounts, taxpayer identification errors, or an incorrect form type.
- Specific forms: You are required to file a separate Form 1096 for each type of accompanying form, such as Form 1099-MISC, Form 1098, or Form 3922, to ensure proper categorization and processing.
- Paper filing only: You do not need to file Form 1096 if you file electronically through the IRS FIRE system, as the electronic filing process automatically transmits your totals to the Internal Revenue Service.
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Key Rules or Details for the 2016 Tax Year
These essential guidelines will help ensure accurate and compliant filing of IRS Form 1096 (2016).
- The 250 Rule: You must file electronically if you are submitting 250 or more information returns of the same type during the 2016 tax year, as paper filing is not permitted above this threshold.
- Separate form for each type: You must prepare a separate Form 1096 for each type of information return, such as Form 1099-MISC, Form 1098, or Form W-2G, to maintain proper record classification.
- Accurate filer information: Ensure that your employer identification number (EIN), mailing address, and contact person information exactly match across all accompanying information returns.
- Original forms only: You must submit only official IRS forms or approved substitutes because the Internal Revenue Service does not accept photocopies due to optical scanning limitations.
- Mailing addresses: Please mail your completed Form 1096 to Austin, TX 73301 if your business location is in the eastern states, or to Kansas City, MO 64999 if your business location is in the western states.
- Correct tax year: You must always use the correct IRS Form 1096 (2016) for the corresponding 2016 tax year, since the IRS does not accept forms from other years for that filing period.
You may also authorize a tax professional to handle your filings through our IRS Power of Attorney guidance.
Step-by-Step (High Level)
Follow these step-by-step instructions to complete and file IRS Form 1096 (2016) accurately.
- Step 1 - Gather forms: You must collect all applicable information returns, such as Form 1099-MISC, Form 1098, Form 3921, or Form W-2G, that you plan to transmit to the Internal Revenue Service.
- Step 2 - Enter Filer Details: Please fill out your business name, mailing address, employer identification number or Social Security number, and contact information accurately in the designated boxes.
- Step 3 - Fill out totals: Record the total number of forms being transmitted, the total federal income tax withheld, and the total amount of payments reported on those forms.
- Step 4 - Mark the appropriate box: Check the box that identifies the type of form you are transmitting to ensure correct classification.
- Step 5 - Sign and date: You are required to sign and date the form, certifying that all information provided is complete and accurate under penalty of perjury.
- Step 6 - Mail to IRS: You should mail Form 1096, along with all accompanying forms, to the appropriate IRS service center before the due date, using flat, unfolded paper forms to prevent processing delays.
If you cannot pay your full tax debt, you may qualify for the IRS’s Offer in Compromise program to settle your balance for less.
Common Mistakes and How to Avoid Them
Here are the most frequent errors and effective ways to avoid them when completing IRS Form 1096 (2016).
- Mixing form types: You must always file a separate Form 1096 for each type of information return to ensure proper processing by the Internal Revenue Service.
- Incorrect Filer Details: Please verify that your business name, tax identification number, and mailing address match exactly across all accompanying forms.
- Wrong tax year forms: You must use the official IRS Form 1096 (2016) for the 2016 tax year, as forms from other years will not be accepted.
- Missing decimals or special symbols: You should include cents and avoid using commas, dollar signs, or other special characters to prevent scanning errors.
- Folding or stapling forms: Please mail all paper returns flat and unstapled to ensure the IRS's scanning equipment can properly read them.
- Duplicate filing: You must maintain organized records to avoid submitting the same information returns more than once.
- Incorrect totals: You should carefully verify the total number of forms, federal income tax withheld, and total amounts reported before mailing the package.
What Happens After You File
After you file IRS Form 1096 (2016), the Internal Revenue Service processes the form using optical scanning systems to read your paper returns. The totals are cross-checked with individual tax returns to ensure that all reported payments match the recipient's records. If discrepancies are identified, the IRS may issue a notice such as CP2100 to request verification or correction of taxpayer information. Penalties may apply for late, incorrect, or incomplete filings, and these penalties increase over time.
FAQs
Do I need to file IRS Form 1096 (2016) if I’m filing electronically?
You do not need to file IRS Form 1096 (2016) if you file electronically through the FIRE system. The Internal Revenue Service automatically receives totals from e-filing forms, so a paper filing is only necessary if you submit information returns on paper.
Can small business owners or independent contractors file Form 1096?
Yes, small business owners, sole proprietors, and those who hire independent contractors must file Form 1096 if they report payments, such as non-employee compensation, miscellaneous income, or gambling winnings, using Form 1099-MISC or other forms in the IRS forms series.
What details are required when completing the filing form?
When you fill out Form 1096, you must include your employer identification number, mailing address, contact person, and the total number of forms being transmitted. You must also mark the appropriate box for the correct tax form type and ensure all the forms are correctly aligned with the IRS filing process.
Can a tax professional or accounting software submit Form 1096?
Yes, a tax professional or accounting software provider can assist with completing your Form 1096. They ensure each accompanying form is accurate, the cover sheet is completed correctly, and reported payments meet IRS standards for federal income tax withheld and overall compliance.
