Do I Need to Submit a 1096 if I Did Not Issue Any 1099s?
An Internal Revenue Service form 1096 is a tax document required by the IRS for transmitting information returns. The purpose of the document is for the IRS to track information about income when it is reported to the IRS by the entity paying taxable income. Therefore, even if a form 1099 is not being filed with the IRS, the taxpayer must file a form 1096 if he files other income reporting documents.
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Form 1096
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The IRS form 1096 is only required to be filed when a taxpayer is transmitting certain other tax forms to the IRS. In essence the form 1096 is a cover sheet that is required to be filed when forms 1097, 1098, 1099, W-2 or 5498 are filed with the IRS. This form identifies the number of tax forms being reported, the amount of taxes withheld and the amount of income that is being reported as paid by the filer. Therefore, a filer must submit a form 1096 if he is issuing a W-2 even though they do not issue a 1099.
Form 1099 Reporting
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A form 1099 is a tax form that is filed by a company or individual notifying the IRS that money was paid as non-wage income, such as interest or independent contractor earnings, to a taxpayer. This allows the filing entity to deduct any payments from income and enables the IRS to track the income of individuals for auditing purposes.
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W-2 Reporting
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The most common form of taxable income is employment wages. The IRS requires employers to issue a form W-2 to employees identifying their earned income and any payroll taxes withheld from their paychecks. The employer must file the W-2 with the IRS at the time it is issued to the employee.
Other Form Reporting
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In addition to 1099 and W-2 filings, the IRS requires a form 1096 to be filed if a company or person issues a form 1097 (church bonds), forms 3921 and 3922 (ISO and ESPP investment income) as well as form 5498 (IRA contributions).
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