1099 Electronic Filing Basics

1099 EFile Basics

This section of our website covers 1099 E-File basics that every business filer and tax professional needs to know before sending 1099 forms electronically to the government (federal or state). It does not take minutes to read this material, but it's very important.

  • This information is for business filers reporting 1099 forms, if you are an individual trying to file your personal income tax information, please visit IRS.GOV instead.
  • The idea behind 1099 E-File is simple: You collect 1099 information for your recipients, you generate a file in a special format, you upload the file to the IRS 1099 E-File Service (FIRE system) and finally the IRS reads the file and sends you a response by email within 24 hours.
  • You will need to register with the IRS before you can send the 1099 e-file submission to them.
  • We recommend you use software to generate the 1099 E-File submission file and uploading the file yourself to the IRS rather than using a service that does the e-Filing on your behalf. Why? Well, aside from saving a lot of money, this way you have access to the actual file that was sent to the IRS, you can always go back to this data if you get audited or if you want to see what you reported to the government. Many software applications (including our software) can import and display the contents of the file in an easy to read format. Of course when you use third-party service, you are risking sensitive information and in many cases the service you use is simply a reseller to some other service. So in summary use 1099 E-File software if you want to save money, protect your information and plan for any audits by the government.
  • Very important tip: Never ever e-File with the IRS at the same time when you send contractors/ recipients their 1099 form copies. Always try to keep at least a two week difference. Why? This way you can correct any errors in the 1099 forms you sent to recipients before sending the final data to the government. Many times your recipients will contact you after receiving their 1099s saying their name or address is not correct. Sometimes the amount is not correct. Just save yourself a lot of headache and keep enough time between sending recipients their copies and transmitting data to the IRS (as long as you are meeting any deadlines).
  • More and more states are now asking for 1099 data to be filed electronically directly with them. Make sure to call your state even if you are filing as little as 10 forms, you might still need to e-File. Most states that require 1099 E-File do accept the IRS format as long as the state information is included.
  • The deadline to E-File is one month after the deadline to file on paper. This is an incentive from the IRS to encourage businesses to use e-Filing.
  • If you want to correct e-Filed 1099 data you may file up to 249 paper corrections even though the originals were filed electronically.
  • If you file 1099s electronically you do not need to file form 1096.
  • You will need a TCC code in order to directly e-File with the IRS. TCC (Transmitter Control Code) is a 5-character password that is assigned by the IRS to the transmitter in order to upload 1099s to the FIRE System.
  • IRS E-File service phone numbers are 1-304-263-8700 or toll-free 1-866-455-7438.

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