How to File Amended 1099 Forms for My Contract Workers - Made Mistakes Originally
So I messed up some 1099 forms I sent to my contractors earlier this year. I'm running a small graphic design business (just me and 5 freelancers) and this is my first year dealing with all this tax stuff myself without an accountant. I filled out the original 1099s back in January but realized I reported some of the payment amounts wrong - I accidentally included some reimbursements that shouldn't have been counted as income for two of my contractors. Now I need to submit amended 1099s but I'm confused about the process. I think I need to complete new 1099 forms and mark the box that says "CORRECTED" but I'm not sure what else I need to do. Do I need to file anything else with the IRS? Do I just send the corrected ones to my contractors or do I need to submit them somewhere else too? And is there a deadline for fixing these mistakes? Any help would be really appreciated because I'm worried about messing this up again and creating problems for my contractors or getting in trouble with the IRS.
19 comments
Join the conversation
Dmitry Petrov
You're on the right track! For filing amended 1099 forms, you need to: 1) Complete a new Form 1099-NEC or 1099-MISC (whichever you originally used) with all the correct information. Make sure to check the "CORRECTED" box at the top of the form. 2) Provide Copy B of the corrected form to your contractor. This lets them know the correct amount they should report on their tax return. 3) File the corrected Copy A with the IRS, along with Form 1096 (Annual Summary and Transmittal form). The 1096 should also be marked "CORRECTED" in the top margin. If you originally filed electronically, you'll need to follow your software or service's procedure for filing corrections. Many have specific steps for amended forms. There's no specific deadline for corrections, but it's best to file them as soon as possible to minimize any issues for your contractors who may have already filed their taxes based on incorrect information.
0 coins
Ava Williams
•Thanks for that info! I have a follow-up question - what if I've already filed my business taxes based on the incorrect 1099 amounts? Do I need to amend my business return too, or just fix the 1099s?
0 coins
Dmitry Petrov
•If you've already filed your business tax return (Schedule C, partnership return, or corporate return) using the incorrect payment amounts, then yes, you should also amend your business tax return. The reporting on your business return should match what you're reporting on the 1099s you issue. If you're reducing the amounts paid to contractors, that would generally increase your business's taxable income, so it's important to make sure everything is consistent.
0 coins
Miguel Castro
I went through this exact headache last year with my consulting business! I found this amazing tool called taxr.ai (https://taxr.ai) that saved me so much stress when dealing with my amended 1099 forms. I was completely confused about how to properly mark them as corrected and what documentation I needed. The tool analyzed my situation and walked me through the entire process step by step - from filling out the new forms to making sure I sent the right copies to the right places. It even helped me understand which parts of my business return might be affected by the changes. Seriously made what seemed like a complicated mess into something manageable!
0 coins
Zainab Ibrahim
•How does it handle state filing requirements? I'm in California and apparently we have additional forms for 1099 corrections that have to go to the state tax board.
0 coins
Connor O'Neill
•Does it actually fill the forms out for you or just tell you what to do? Seems like it might just be cheaper to call an accountant for a quick consultation rather than paying for another service.
0 coins
Miguel Castro
•The tool does include state-specific guidance including for California. It identifies which state forms you need to submit corrections to and provides the specific requirements for your state tax authority. It saved me from missing some Pennsylvania-specific requirements I had no idea about. It doesn't physically fill out the forms for you, but it creates a detailed guide customized to your situation with all the steps and fields you need to complete. For me, this was actually more helpful than a quick accountant call because I could refer back to it multiple times as I worked through the process, and it cost much less than the $250/hour my accountant charges for questions.
0 coins
Zainab Ibrahim
Just wanted to update after trying taxr.ai from the suggestion above. It was actually really helpful for my situation with the California amended 1099 forms! The tool gave me specific instructions for both the federal AND state requirements, which I had no idea were different. It pointed out that California requires a separate DE-542 filing for independent contractors that I completely missed the first time around. The step-by-step checklist made sure I didn't miss anything, and now I feel confident that both my federal and state filings are correct. Definitely less stressful than trying to piece together information from different IRS publications!
0 coins
LunarEclipse
If you're still struggling with amended 1099 forms after trying everything else, you might want to just get expert help directly from the IRS. I spent DAYS trying to get through their phone lines with no luck before finding Claimyr (https://claimyr.com). They have this service where they basically wait on hold with the IRS for you and then call you when an actual human agent is on the line. I was super skeptical, but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c - I used it when I had a similar amended 1099 situation and had specific questions about correcting forms I'd e-filed. Got connected to an IRS agent in about 45 minutes instead of spending my whole day on hold. The agent walked me through exactly what I needed to do for my specific situation.
0 coins
Yara Khalil
•Wait, how does this actually work? Do you have to give them your personal info? Seems kinda sketchy to have a third party involved in IRS calls.
0 coins
Keisha Brown
•Yeah right. The IRS NEVER picks up. I've been trying for 2 months to get someone on the phone about my amended return. No way this actually works - they probably just take your money and you still end up waiting forever.
0 coins
LunarEclipse
•They don't need any sensitive personal info - you just provide your phone number and they call you when they've reached an IRS agent. They're basically just waiting on hold so you don't have to. When they get through, they connect you directly with the agent, then drop off the call. They never hear your conversation with the IRS. I understand the skepticism - I felt the same way! But consider that I'd already wasted nearly 8 hours across multiple days trying to reach someone at the IRS. I was desperate enough to try anything. It literally saved me from taking an entire day off work just to sit on hold. When they called me, I was connected to an actual IRS agent who answered all my questions about amended 1099 filing requirements.
0 coins
Keisha Brown
OK I need to eat some crow here. After my skeptical comment above, I got desperate enough to try Claimyr and it actually worked. I've been trying to reach the IRS business line for WEEKS about my amended 1099 situation. Got a call back in about an hour and was connected with an IRS agent who explained that for my specific situation (I had misclassified some box codes on contractor 1099s), I needed to submit the corrected forms by paper even though I originally e-filed. Apparently e-filing corrections doesn't work for all types of amendments. The agent also told me exactly which address to mail them to based on my location. I would have never figured this out on my own or from the website. Still can't believe I didn't have to spend hours on hold!
0 coins
Paolo Esposito
Has anyone actually received a penalty for filing incorrect 1099s? I'm in a similar situation but wondering if it's even worth the hassle to amend them. Mine were only off by about $200 each for three contractors.
0 coins
Amina Toure
•Yes! Don't ignore it! I didn't correct some 1099s two years ago (was off by around $500 total) and got hit with a $270 penalty ($50 per form) for "intentional disregard" of filing requirements. Plus one of my contractors got a notice from the IRS because what I reported didn't match his return. Huge headache that could have been avoided.
0 coins
Paolo Esposito
•Thanks for the warning! I had no idea they would actually follow up on relatively small amounts. Guess I better get those amendments filed ASAP. Did you have to pay any additional interest or just the penalty amount?
0 coins
Oliver Weber
One thing nobody mentioned - if you're amending 1099s because you OVERPAID (reported higher amounts than actually paid), make sure your contractors know ASAP. If they already filed their taxes reporting the higher amount, they'll need to file an amended return too. Otherwise they'll end up paying taxes on money they never received!
0 coins
FireflyDreams
•This happened to me as a contractor! My client issued a corrected 1099 reducing my income by $3k but didn't tell me. I had already filed and paid taxes on the higher amount. Found out months later and had to file an amended return to get my money back. Would have been nice to know immediately!
0 coins
StormChaser
•This is actually exactly what happened - I included some expense reimbursements in their 1099 totals that shouldn't have been counted as income. I'll definitely let them know right away so they don't overpay on their taxes. I really appreciate everyone's advice here. I'm going to start with the corrected forms and make sure I check the "CORRECTED" box, then send copies to my contractors with an explanation. I'll also look into the resources suggested to make sure I get the state filing requirements right too.
0 coins