What IRS Form 1096 (2019) Is For
IRS Form 1096 (2019) serves as the annual summary and transmittal form used by businesses and individuals to submit paper information returns to the Internal Revenue Service. It functions as a cover sheet that summarizes the total number of accompanying forms, such as Form 1099, Form 1098, and Form W-2G, which report various types of transactions, including payments to independent contractors, mortgage interest, incentive stock option activity, and gambling winnings. This form ensures the IRS receives a consolidated report of all paper-filed information returns for a specific tax year.
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 (2019)
You use IRS Form 1096 (2019) when transmitting paper information returns instead of filing electronically through the FIRE System.
- Standard due dates: Form 1096 (2019) must be accompanied by the corresponding information returns by the applicable deadlines, such as January 31 for Form 1099-MISC with nonemployee compensation and February 28 for most other paper-filed forms.
- For paper forms: This form is required only when filing paper copies; those filing electronically through the FIRE System do not need to include it.
- For small businesses: Many small businesses use Form 1096 to report payments to independent contractors or miscellaneous income for the prior tax year.
- Filing late or amended returns: You must file a new Form 1096 with each set of corrected or late information returns to ensure proper IRS processing.
- Reporting specific payments: Form 1096 is also used to summarize returns related to employee stock purchase plans, stock acquired through incentive stock options, and other forms that report financial transactions requiring IRS oversight.
Key Rules or Details for the 2019 Tax Year
For the 2019 tax year, several key rules and requirements governed the filing of IRS Form 1096 (2019).
- Separate form per type: A separate Form 1096 must be filed for each different kind of accompanying information return to ensure accurate processing by the Internal Revenue Service.
- Paper filing requirement: Filers submitting 250 or more information returns of one type were required to use electronic filing, while those with fewer could submit paper forms with Form 1096.
- Official scannable forms only: The IRS requires official red-ink scannable paper forms or forms produced by IRS-approved accounting software that comply with the specifications in Publication 1179.
- Matching information: The filer’s name, address, and Employer Identification Number or Social Security Number must match exactly across all accompanying forms to prevent rejection or penalties.
- Mailing instructions: Filers were required to send the completed form and accompanying forms to the appropriate IRS Service Center—Austin, Ogden, or Kansas City—based on their business address.
- No stapling or folding: The IRS prohibited stapling or folding documents because optical scanners could not accurately process them if they were damaged or had attachments.
If you face penalties due to errors or late submission, our penalty abatement services may help reduce or eliminate these fees.
Step-by-Step (High Level)
The process for completing and submitting IRS Form 1096 (2019) follows these essential steps.
- Step 1 - Gather your forms: Collect all the corresponding information returns, such as Form 1099, Form 1098, or Form W-2G that you plan to submit for the tax year.
- Step 2 - Enter filer details: Include the legal name, complete mailing address, and contact information of the business or person submitting the forms.
- Step 3 - Provide taxpayer identification number: Enter either the Employer Identification Number or the Social Security Number, depending on whether the filer is a business entity or an individual.
- Step 4 - Calculate totals: Count the number of accompanying forms, total the amounts reported, and list any federal income tax withheld in the corresponding boxes.
- Step 5 - Identify the form type: Mark an “X” next to the correct box to indicate the specific form being transmitted, such as Form 1099-MISC for nonemployee compensation or Form W-2G for gambling winnings.
- Step 6 - Sign and date the form: Sign under penalty of perjury, include your title if applicable, and date the transmittal before submission.
- Step 7 - Mail to the correct IRS Service Center: Send the complete package of Form 1096 and all accompanying information returns to the proper IRS mailing address by the applicable due date.
You may also authorize a tax professional to handle your filings through our IRS Power of Attorney guidance.
Common Mistakes and How to Avoid Them
These are the most common errors filers make when submitting IRS Form 1096 (2019), along with tips on how to avoid them effectively.
- Mixing different types of forms: Each information return type must have its own separate Form 1096 to prevent the IRS from rejecting or misprocessing your submission.
- Using photocopies or unapproved forms: Avoid printing or copying forms from the IRS website, as only official, red-ink, scannable paper forms or those produced by approved accounting software are accepted.
- Stapling or folding forms: Do not staple or fold the forms since the IRS’s optical scanning equipment cannot correctly process attached or creased pages.
- Incorrect totals or box entries: Always review your totals carefully and use the specific IRS instructions to ensure all amounts and box figures are accurate.
- Mismatched filer details: Confirm that your name, address, and Employer Identification Number or Social Security Number are identical across all accompanying forms and the transmittal.
- Missing filing deadlines: Verify the required due dates, such as January 31 for nonemployee compensation and February 28 for most other paper submissions, to avoid penalties.
- Filing paper forms when electronic filing is required: Ensure that filers with 250 or more information returns use the FIRE System for e-filing instead of submitting paper forms to avoid compliance issues.
For post-filing verification or to check your submission status, use our IRS Account Transcript Service.
What Happens After You File IRS Form 1096 (2019)
After submitting Form 1096 and its corresponding information returns, the Internal Revenue Service scans and processes them through optical recognition systems. The information is matched with tax filings submitted by the recipients to verify income and payment accuracy. If mismatches occur, the IRS may issue notices such as CP2100 to correct taxpayer identification details or initiate backup withholding. Penalties may be assessed for incorrect, late, or missing filings.
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 does the annual summary include in IRS Form 1096 (2019)?
The annual summary includes totals for all the following forms that report various transactions, such as payments, mortgage interest, or stock acquired through employee stock purchase plans. It ensures the IRS receives a complete record of information returns submitted for the tax year.
How do independent contractors relate to filing Form 1096 (2019)?
Independent contractors are often paid by small businesses that are required to file Form 1096, along with Form 1099-MISC, to report their nonemployee compensation. For example, the form acts as the transmittal that summarizes the returns to the IRS for these payments.
When should a business file Form 1096 (2019)?
A business must file Form 1096 whenever it submits paper copies of information returns instead of filing electronically. Filing is required to ensure that all the forms are transmitted together with accurate totals and signed by the authorized person responsible for reporting.
What does “all the forms” mean in relation to Form 1096?
“All the forms” refers to every accompanying form that reports transactions to the IRS, including Form 1099, Form 1098, and Form W-2G. Each type of form must be summarized separately, which means one Form 1096 is used for each set before submission.
