If you work as an independent contractor, the company you work for should send you a Form 1099-MISC by Jan. 31 of the following year. In addition, you should receive 1099s for interest earned (1099-INT), dividends received (1099-DIV), cancellation of debt (1099-C), government payments (1099-G), proceeds from broker transactions (1099-B) and retirement distributions (1099-R). Organizations at times can fail to send the 1099 in time. You don’t have to attach it to your return, so you can go ahead and file. If the 1099 arrives later, you need to take action if the info contained in the 1099 changes your income and taxes owed.
If you owe additional taxes on the amount listed on the 1099, you can be fined 0.5 percent a month for each month the taxes are late. The organization that failed to issue it may get penalized, as well. The IRS levies fees of $50 for each time an organization fails to issue a 1099 by the deadline of Jan.31. The fine doubles if the IRS thinks the failure to issue was intentional.
When you file your return without a 1099, you must reconstruct the amounts you should have been paid. Using your own records or bank deposit receipts, you may be able to accurately calculate the amounts you received. However, when a 1099 arrives after you have already filed taxes, check the amounts the organization claims it paid. A copy of the 1099 is sent to the IRS, and if the amount the 1099 says was paid you doesn’t match what you claim you were paid, the IRS may call or write you.
If your late 1099 shows a different amount than you claimed, you must file an amended return. Fill out Form 1040x, indicate the corrected amount, and pay any taxes that are due on that amount. If the error is in your favor, you may have a refund coming.
Form 1040 SE
If your 1099 income was from self-employment, file Form 1040SE along with your amended return. This allows you to calculate the self-employment tax you owe on any additional amount that wasn’t included on your original return.
Kevin Johnston writes for Ameriprise Financial, the Rutgers University MBA Program and Evan Carmichael. He has written about business, marketing, finance, sales and investing for publications such as "The New York Daily News," "Business Age" and "Nation's Business." He is an instructional designer with credits for companies such as ADP, Standard and Poor's and Bank of America.