Sometimes I wonder why did I start working and grow old enough to work in the first place. Work means you either have a business or are employed by someone. That gets you a regular income, which in turn makes you pay taxes. Now the Internal Revenue Service (IRS) or any such governmental organization of any country does not exactly make this whole income tax issue an easy one. There is a whole lot of paperwork involved in it. Amongst the truck load of forms that there are for the working class to handle, there is this form 1096. In case you are going to have an encounter with that anytime soon, you might want to know about 1096 form what is it.
What is a 1096 Form?
Simply put, form 1096 is a summary of information forms which a person sends to the IRS. This form is also known as the Annual Summary and Transmittal of US Information Returns. 1096 is a form which typically a business owner might be required to fill in at the end of a tax year. The Copy A, the top piece of Form 1096, that is filed with the IRS is bright red. While all other text is black, which is how you identify the form. Primarily a 1096 needs a business or the filling company to identify the name, amount of tax payments on all 1099 forms, along with 1099 MISC for contract work. In addition to that, there has to be a 1099 for dividend payments and any withheld taxes if any. As per the IRS regulations, the returns have to be filed with the IRS typically by the end of January immediately following the year for which the income items or other proceeds have been paid. However, this time frame is subject to change, so anyone filling 1096 should keep tabs on that. The forms which are most frequently summarized by form 1096 are -
- Form 1098
- Form 1099
- Form 5498
- Form W2-G
How to Prepare a 1096 Form?
Just knowing about the form is not enough if you are owning a business. How to prepare it and fill it is another thing which an individual having his or her own business cannot escape. Unfortunately this is where the most irritating part of filing income tax comes in. There is nothing more intimidating than having to fill up these tax forms and the like. At least, I find these things really tough. Still, when we got to do it, we got to do it. There is no option to it, unfortunately. Hence here is a bit about preparing and filling a 1096 form.
Step 1
Check and assess if in the course of your business dealings, you have issued any 1099-MISCs For report of payments of $600 or more for rent, professional fees, contract workers and other payments to the individuals. Similarly take stock if you have issued any 1098s, 1099s, 5498s or W2-G in your business transactions. If a person has received mortgage interest payments, paid interest, canceled a debt, paid long-term care benefits or had proceeds from real estate transactions, in that case such forms are used.
Step 2
As mentioned earlier, 1096 is the summary of all the other tax forms, so for each type of the tax form you will have to get a separate 1096. Remember one type, for instance if you have three 1099 MISC's, and two 5498, you will need to have one 1096 for the former and another one for the latter. Yes, this is a hassle, however it is important if you want to deal properly with tax deductions and be clear with the tax related paperwork.
Step 3
Fill in your name address, phone number and all other requisite details along with either your social security number or an Employee Identification Number (EIN). Social security number is a must, it will not be a huge problem if you do not have an EIN.
Step 4
Tick the box at the bottom for indicating the type of form you are filing. If you are filing 1099-MISCs, select only the box for 1099-MISCs. Then type the total number of forms which you are issuing along with 1096. For instance, mention "5" on the appropriate column if you are issuing five plain 1099s.
Step 5
Mention the total of any federal income taxes you might have withheld from payments on the forms for which this 1096 is being issued by you. Apart from that, type in the total amount of payments on the forms for which you are going through this endeavor of 1096.
Step 6
All you need to do now is to sign, put in the title and date and then mail the completed form to the IRS center nearest to you. The mailing addresses will be on the second page of Form 1096.
Last, but not the least, check the form 1096 thoroughly once you have filled it to see if there are any mistakes or columns to be filled. If you are not comfortable filling the form, there is no harm in getting a tax consultant to help you.
A good thing to remember here is that there are three 1099-MISCs on a sheet. All of these forms have five copies each - copy A, copy 1, copy B, copy 2 and copy C. Now preferably, type the information on copy A, although you can fill up in bold ink. The other copies are made of self-duplicating carbon paper, so you need not worry about them. I hope this was useful!
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