What Is Tax Form 1096?
If you must submit information forms -- forms such as the 1099-MISC that lists income you provided to non-employees -- you must also submit Form 1096. Form 1096 is a cover sheet summarizing the information you put on all such forms. You must submit Form 1096 to the Internal Revenue Service along with a copy of the information forms you intend to distribute to taxpayers.
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Summary Form
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Form 1096 summarizes information on Forms 1098, 1099, 5048 or W-2G. You must use a separate Form 1096 for each type of form you are submitting to the IRS. On Form 1096, provide your contact information and taxpayer identification number as well as the total amount of income reported on all your forms of a particular type and total tax withheld. For example, if you are submitting 27 Form 1099s, you would report on this form that you are submitting this number of 1099s and list the total income and tax withheld listed on all the forms.
Who Files Form 1096
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In general, Form 1096 accompanies other forms that business owners generate. For example, people who hire independent contractors generate Form 1099-MISC for their contractors and mortgage brokers distribute Form 1098s to homeowners paying interest on mortgages. Form W-2G involves gambling winnings and is usually submitted by casino owners.
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How to Complete
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Place your preprinted address label in the top left corner of Form 1098. If you do not have a preprinted label, write this information by hand. Put your contact information in the boxes below your preprinted label. In Box 1, place your employer identification number and in Box 2, provide your Social Security number. Put the total number of forms in Box 3. Record the total federal income tax withheld in Box 4 and the total income reported in Box 5. Mark the correct form type in Box 6 and sign and date the form. Attach the forms you are submitting to Form 1096 and mail it to the IRS.
Electronic Filing
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You cannot use Form 1096 with electronically filed forms, as paper forms must accompany it. You must file electronically if you submit more than 250 forms of the same type. Failure to file electronically when required to do so results in a penalty. If you correct the error within 30 days of filing, the penalty is $15 per form submitted with your 1096, up to $75,000. After 30 days, the penalty rises to $30 per submitted form with a maximum penalty of $150,000 and after August 1, the penalty becomes $50 per submitted form with a maximum penalty of $250,000.
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