What IRS Form 1096 (2017) Is For
Form 1096 is the annual summary and transmittal document the Internal Revenue Service requires when filing paper information returns such as Form 1099, Form 1098, Form 3921, and Form W-2G. It serves as a cover sheet that summarizes total payments, total amount withheld, and filer details, including the employer identification number, name, and address. Businesses and corporations filing paper forms must include Form 1096 to report information returns accurately for the tax year.
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When You’d Use IRS Form 1096 (2017)
You would file Form 1096 when submitting paper information returns to the IRS. Below are the main instances:
- Original Filing: You must use Form 1096 when submitting paper copies of information returns such as Form 1099-MISC, Form 3921, or Form W-2G for the first time during the tax year.
- Late Filing: You are required to submit Form 1096 when filing after the due date to ensure the IRS still receives your report of payments made to contractors, employees, or other persons.
- Corrected or Amended Filing: You must prepare a new Form 1096 when correcting previously filed forms that contained errors in amounts, tax identification numbers, or addresses.
- Filing for Independent Contractors: You are obligated to include Form 1096 when your trade or business has paid independent contractors or service providers and you are submitting paper information returns to report those payments.
- Specific Form Type Grouping: You must file a separate Form 1096 for each type of form transmitted, such as one for Form 1099-MISC and another for Form 1099-INT, to ensure accuracy and compliance with the law.
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Key Rules or Details for 2017
Several key rules applied when filing IRS Form 1096 for the 2017 tax year:
- Electronic Filing Threshold: Filers who submitted 250 or more information returns of the same type were required to file electronically rather than by paper submission.
- Official Form Requirement: The IRS did not accept photocopies or printed forms from its website for Copy A, and only original or IRS-approved vendor forms were permitted.
- One Form Type per 1096: Each Form 1096 could only transmit one category of information return, such as Form 1099-MISC for contractor payments or Form 3921 for stock acquired through an employee stock purchase plan.
- Matching Information: The filer’s name, business address, and employer identification number had to match exactly across all forms transmitted with the same Form 1096.
- Mailing and Deadlines: Paper forms had to be mailed flat and uncreased to the correct IRS service center by February 28, while forms reporting nonemployee compensation were due by January 31.
- Filing Electronically Exception: Businesses that filed electronically did not need to include Form 1096 because the e-filing system automatically managed the transmittal process.
You may also authorize a tax professional to handle your filings through our IRS Power of Attorney guidance.
Step-by-Step (High Level)
Filing IRS Form 1096 (2017) involves organization and accuracy from start to finish. The following steps summarize the correct procedure:
- Gather and Review Forms: Collect all paper information returns, such as Form 1099, Form 3921, and Form W-2G, ensuring all details and totals are accurate before submission.
- Group by Form Type: Sort all forms by category so that each Form 1096 transmits only one type of return, such as separating Form 1099-MISC from Form 1099-INT.
- Complete Form 1096: Fill in the employer identification number, business name, and address, as well as the total number of forms, the total amount reported, and the total federal income tax withheld.
- Check for Accuracy: Review that all identifying information and amounts entered on the information returns correspond exactly with what is shown on Form 1096.
- Mail the Forms: Send the transmittal and grouped forms to the designated IRS service center by the required due date, using First-Class Mail, and keep copies for your company’s records.
For post-filing verification or to check your submission status, use our IRS Account Transcript Service.
Common Mistakes and How to Avoid Them
Avoiding common filing mistakes helps ensure smooth IRS processing and prevents unnecessary penalties. Below are the most frequent errors and how to avoid them:
- Mixing Form Types: Submitting multiple types of information returns under a single Form 1096 often leads to rejection; you must prepare a separate transmittal for each form type to ensure compliance.
- Incorrect Information: Providing an incorrect employer identification number, business name, or address may cause IRS delays; verify that every field matches your accompanying information returns before filing.
- Improper Formatting: Omitting decimal points or including commas and special characters in money boxes can cause scanning issues. Always enter plain numbers with two decimal places, such as 1230.00, to maintain accuracy.
- Improper Printing: Printing Copy A of the form directly from the IRS website produces unscannable documents; use only authorized paper forms supplied by IRS-approved vendors or official IRS channels.
- Folding or Stapling Forms: Folding, stapling, or otherwise altering paper submissions can interfere with machine processing. Please send all forms flat, unstapled, and packaged correctly in the same envelope.
- Duplicate or Zero Entries: Submitting duplicate returns or entering zeros in boxes that should remain blank results in processing errors and potential penalties; maintain complete filing records and carefully review each form before mailing.
What Happens After You File Form 1096 (2017)
After you file Form 1096, the Internal Revenue Service scans and records each document to capture totals, taxpayer identification numbers, and form types. The IRS then matches this data with individual and corporate tax statements to confirm that all income and payments have been reported correctly. While e-filing provides immediate acknowledgment, paper submissions do not generate instant confirmation. Businesses should therefore retain copies of all filed forms, mailing receipts, and payment records for at least three years in case of corrections, audits, or inquiries.
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.
FAQs
What is included in the annual summary on IRS Form 1096 (2017)?
The annual summary on Form 1096 includes totals from all paper-filed information returns, showing the number of forms submitted, total amounts reported, and the employer identification number. It functions as the official transmittal that the IRS uses to match payments and other forms for the tax year.
Do I need to include Form 1099-MISC when filing Form 1096?
Yes, when you file Form 1096, it must summarize specific information returns such as Form 1099-MISC. The IRS requires you to file Form 1099 separately for each contractor and include the transmittal for certain other information returns as part of your submission.
How does Form 1096 apply to independent contractors?
Businesses must file Form 1096 when reporting payments made to independent contractors during the tax year. The transmittal summarizes each Form 1099-MISC filed for these contractors and ensures that the IRS properly records the compensation reported on these returns.
Is Form 1096 related to the Wage and Tax Statement (Form W-2)?
No, the Wage and Tax Statement (Form W-2) is for employees, while Form 1096 is used to transmit other forms such as Form 1099-MISC or Form 3921. However, both serve as official tax documents to report wages, payments, or incentive stock option transactions.
