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Form 1099

Processing and Filing Corrections

Your 1099 data is placed in corrections mode after your request to prepare 1099 data is submitted. If you need to correct the data on an original information return, use the corrections process to generate the corrected 1099 data for filing with the IRS and/or state taxing authority. The corrections process includes:
  1. Correcting source data.
  2. Submitting a tax return processing request.
  3. Preparing the corrected 1099 data file.
  4. Downloading and filing state correction data files for states with direct filing requirements.
During the corrections process, only those accounts that were corrected need to be included in a tax return processing request.
ONESOURCE Trust Tax determines if the original information return was filed with the IRS or state taxing authority at the time the account is processed. If the original return was filed, the recipient and form information is calculated and compared with the data from the original filing. If the data is different, correction records are created for filing with the IRS or state taxing authority.
Multiple correction files can be created throughout the year. The files are created after you submit the request to prepare 1099 data. Federal data files are submitted to the IRS for you on each Wednesday beginning in late February and ending in mid-December.
note
For states with direct filing requirements, you are responsible for filing corrections with the state taxing authority using the method outlined by the state taxing authority.

Correcting Source Data

Before you begin correcting source data, access the Account Information page, select the
Corrected 1099 (for printed 1099 only)
 check box under the
1099 Information
 collapsible section then select
Save
. Selecting this check box marks the information return as CORRECTED after the tax return is processed.
note
Selecting the
Corrected 1099 (for printed 1099 only)
 check box does not process a corrected information return.
Recipient Information
The source data for the recipient information is the beneficiary or the paid-to recipient. If recipient information needs to be corrected, the correction should be made only once, even if the recipient has multiple types of 1099 detail in a single account or multiple accounts. Contact the ONESOURCE Trust Tax Support team if a recipient has information returns from multiple accounts and a correction needs to be entered for only one account. ONESOURCE Trust Tax will make a copy of the recipient record so corrections can be made for only one account.
To correct the information for an existing recipient, use the Recipient Detail page in the account binder. For a corrected recipient name or TIN, the original recipient name and TIN are automatically included in the correction file with zeros, and the corrected recipient name and TIN are reported in the correction file with the dollar amounts. If you are correcting other types of recipient information (such as an address, city, state or zip code correction), the recipient is reported in the correction file only once with the corresponding dollar amounts.
If you need to add a recipient during the corrections process:
  1. From the account binder, access the New Recipient page by selecting the
    Recipients
     main topic then the
    New Recipient
     subtopic.
  2. Add the recipient information then select
    Save
     to add the recipient.
  3. Change the 1099 percentage for each recipient listed on the account so that the total 1099 distribution percentage equals 100 percent. The 1099 percentage for a recipient can be changed using the
    1099 Distribution Percentage
     field under the
    Distribution-Decimal Dollar
     collapsible section on the Recipient Detail page or by using the
    1099%
     column in the recipient grid under the
    Recipient Listing
     collapsible section.
  4. Select
    Save
    .
If necessary, you can exclude the details for a recipient from the correction data file before the correction data file is prepared. See Excluding Correction Details from a Correction Data File for details.
Payer Information
The IRS requires you to correct payer information by writing a letter containing the information listed below. You cannot use ONESOURCE Trust Tax to correct payer information during the corrections process.
  • Name and address of the payer
  • Type of error (including the incorrect payer name/TIN that was reported)
  • Tax year
  • Payer TIN
  • Transmitter Control Code (TCC)
  • Type of return
  • Number of payees
  • Filing method (paper or electronic)
  • Was federal income tax withheld?
Send the letter to:
Internal Revenue Service, Information Returns Branch230 Murall Drive, Mail Stop 4360Kearneysville, WV 25430
1099 Details
The source data for 1099 details are the transactions and sales. To correct the information for an existing transaction or sale, use the Transaction Detail or Sale Detail page in the account binder. To add a missing transaction or sale, use the account binder's New Transaction page or the New Sale page. Select
Save
.
note
In the corrections file that is sent to the IRS, the recipient record is sent as an original record and may be subject to IRS penalties.

Submitting a Tax Return Processing Request

Only those accounts that were corrected need to be included in the tax return processing request. The tax return processing request can be submitted from a register or the account binder using the same steps you used to process the tax return for the original information return. At the time the account is processed, ONESOURCE Trust Tax determines if the original information return was filed with the IRS and/or state taxing authority. If the original return was filed, the recipient and form information is calculated and compared with the data from the original filing. If the data is different, correction records are created for filing with the IRS and/or state taxing authority.
Processing from a Register
To submit a tax return processing request from a register:
  1. From the Register Listing page, select Run for the register that includes the accounts you want to process.
  2. Select the check box in the first column for each account you want to process. If you want to select all of the accounts in the register, do not select any check boxes.
  3. Select the
    Process
     subtopic to display the Process page.
  4. Select
    Tax Return
     from the
    Request
     drop-down list.
  5. Select
    1099/FMV
    ,
    5498/5498-ESA
    ,
    1098
     or
    1099 MISC/NEC
     from the
    Document Option
     drop-down list. If you select
    1099 MISC/NEC
     and an account requires both Form 1099-MISC and 1099-NEC then you must preserve the first document (by filing or freezing it) before processing the second type. If the first document is not frozen, the print file generated from the second processing request will overlay the first document.
  6. Select
    Process
    .
Processing from the Account Binder
To submit a tax return processing request from the account binder:
  1. Open the account you want to process.
  2. Select
    Process
     from the
    Account Action
     drop-down list to display the Process pop-up window.
  3. Select
    Tax Return
     from the
    Request
     drop-down list.
  4. Select
    1099/FMV
    ,
    5498/5498-ESA
    ,
    1098
     or
    1099 MISC/NEC
     from the
    Document Option
     drop-down list. If you select
    1099 MISC/NEC
     and an account requires both Form 1099-MISC and 1099-NEC then you must preserve the first document (by filing or freezing it) before processing the second type. If the first document is not frozen, the print file generated from the second processing request will overlay the first document.
  5. Select
    Process
    .

Excluding Correction Details from a Correction Data File

If necessary, you can exclude the details for a recipient from the correction data file. To exclude correction details:
  1. Open the account that has the correction details you want to exclude.
  2. Select the
    Information Returns
     main topic.
  3. Select
    Corrections
     under the
    Existing 1099 Recipient Summary
     collapsible section.
  4. Select the form type you want to review from the
    Form Type
     drop-down list then select
    Search
     to display the list of recipients in the grid.
  5. Select the
    Taxpayer ID
     link for the recipient. The corrections page for the recipient displays.
  6. Under the form details collapsible section, select the
    Exclude from filing
     check box.
  7. Select
    Save
    .

Submitting the Request to Prepare Corrected 1099 Data

To submit the request to prepare corrected 1099 data:
  1. Select
    HOME
    ,
    Admin
     then
    Prepare 1099 Data
    .
  2. Under the
    Prepare 1099 Data Files
     collapsible section, select the
    Federal
     and/or
    State
     check boxes for the specific information return forms you want to prepare and file. Selecting a
    Federal
     check box indicates that you want the specific information return form filed with the IRS. Selecting a
    State
     check box indicates that you want the specific information return form filed with the state using the IRS CFS program.
  3. Under the
    State Direct Files
     collapsible section, select the check box for each state you want to prepare a direct filing for. If you want to prepare a direct filing for all states, select the check box in the column heading.
  4. Select
    Submit
    . Your request to prepare corrected 1099 data is submitted.
  5. ONESOURCE Trust Tax creates a separate correction data file for each information return type that has correction details. The data files are submitted to the IRS for you on each Wednesday beginning in late February and ending in mid-December. For states with direct filing requirements, you are responsible for downloading the state correction data file then filing those corrections with the state taxing authority using the method outlined by the state taxing authority. See Downloading State Correction Data Files for States with Direct Filing Requirements for details.
  6. On the Documents and Data Files page, federal and CFS correction data files are created and stored in the
    Folder: 1099-Data Files as Submitted to the IRS
     category for the tax year. State correction data files for states with direct filing requirements are stored in the
    Folder: 1099-Data Files to be filed with the State
     category for the tax year on the same page. To access the Documents and Data Files page, select
    HOME
    ,
    Admin
     then
    Documents and Data Files
    .

Downloading State Correction Data Files for States with Direct Filing Requirements

To download a state correction data file for a state with direct filing requirements:
  1. Select
    HOME
    ,
    Admin
     then
    Documents and Data Files
    .
  2. Open the
    Folder: 1099-Data Files to be filed with the State
     category for the tax year.
  3. Select the
    File Name
     link for the state correction data file. The following message displays.
  4. Select OK.
  5. Select
    Save
     on the File Download window. The Save As window displays and allows you to save the file to the where you want to save it and with the file name you want to save it as.
note
You are responsible for filing state correction data files with the state taxing authority using the method outlined by the state taxing authority.

This article applies to:

  • PRODUCT: ONESOURCE Trust Tax