Beginning in tax year 2023, the IRS has introduced new guidelines concerning 1099s and W-2s. Listed below are 3 things that you need to know regarding these changes.
1. Paper Filing Threshold
In 2023, the paper threshold for filings with the IRS for W-2s and 1099s has been reduced from 250 to 10. That means, if you have a combined amount of ten 1099s and W-2s, that's the maximum that you can file via paper. Otherwise, you are required to file electronically.
2. Correction Procedures
The process for filing corrections for 1099s and W-2s should mirror how you filed the original forms. For example, if you initially filed electronically, then you need to correct it electronically. Also, if you filed via paper, you need to correct it via paper.
Further guidance on this topic can be found in the IRS and Treasury's final regulations regarding e-filing for businesses. To delve deeper into correction procedures, refer to resources on how to rectify a W-2 or 1099.
3. Direct Filing of 1099s with the IRS
The IRS has a NEW system called the Information Returns Intake System also known as IRIS. IRIS allows you to electronically file your forms directly to the IRS for free. Now here's the catch. In order for you to do this, you'll need to register to obtain your Transmitter Control Code (TCC). The downside is, it can take up to 45 days to receive this code, but you need it in order to use the IRIS system. Make sure to do this right away if you plan on filing with the IRS directly.
It's important to note that if you need to make corrections to 1099s, there are certain limitations associated with IRIS. Specifically, this system allows corrections only for forms that you initially submitted through the IRIS system.
For more information regarding filing directly through IRIS, please check out the IRS website at https://www.irs.gov/filing/e-file-forms-1099-with-iris
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