There are 2 types of tax forms you’ll likely fill out this year: personal income tax forms and business tax forms. If you don’t run a small business, you’ll need to complete the relevant forms solely for your personal income. If you do run a small business, you may have to complete an IRS 1096 form.
Form 1096 is meant for business owners who hired employees or paid independent contractors at some point during the year. It’s a cover sheet for additional documents that alerts the IRS to the type of forms you are submitting. There are important guidelines set by the IRS relating to Form 1096, so understanding these rules can help you to avoid penalties.
Do I Need to File a 1096 Form?
If you’re not a business owner, you don’t need to file a 1096 form. If you own a business and use independent contractors, it’s very likely you’ll need to submit a 1096 form.
Uses for a 1096 Form
A 1096 form serves as a cover sheet to report the income of employees and contractors. The information filled out on the form relates to you, the business owner or employer—not the person for whom you’re completing the form.
For example, if you need to submit a 1099 form to report how much an independent contractor made, you would complete a 1096 form to alert the IRS to your business and the type of form you’re submitting. This connects the contractor to your company and ensures the correct forms are submitted.
Sections 1 through 5 on the form ask basic questions about your business (like your name and email address), and section 6 asks what kind of form you’re attaching. You may only attach 1 form per 1096 form, which means you should only check 1 box. This is important to remember, especially if you are submitting multiple 1099s for various contractors or have multiple forms to complete for each person you hired.
Where Can I Get a 1096 Form?
While there are many forms created by the IRS you can download online or even fill out electronically, you need to order 1096 forms ahead of time. These will be shipped to your place of business for your accounting team to fill out.
In order to process the forms, you need to upload scannable copies, along with the completed attached forms (like 1099s) that go along with them. For example, if you need to submit a 1099 form, then you would order a 1096 Form, complete it, and submit it with the finished 1099.
You can order copies of 1096 forms from the IRS website, and they will send them free of charge. You should expect them to arrive within 10 business days unless there is a delay.
If you need to submit more than 250 copies of Form 1096 for this tax year, then you must file electronically or face a fine by the IRS. If you need fewer than 250 copies, then you may be able to mail them in.
When Should I File Form 1096?
There are 2 important dates to remember if you need to fill out Form 1096. The first is January 31, which is the due date to submit 1099 forms to independent contractors as well as W2 forms for employees. These forms must at least be processed or in the mail by this date. The January 31 date allows employees and contractors to know when they’ll receive their forms to file their personal income taxes on time.
On the second important date, February 28, you’ll need to submit your 1096 forms for the previous year. This gives your company a month after you submit your 1099s to make sure each form has a 1096 cover letter that can be scanned and accepted by the IRS.
If any of these dates fall on a weekend, then the due date will get pushed forward to the next business day.
Order Your 1096 Forms Early
If you need to complete 1096 forms for your employees and independent contractors, calculate how many copies you’ll need and consider ordering them early from the IRS. This will protect you from any late filing fees if there’s a delay in shipping them, and it gives your accounting team time to complete the forms if you need to submit several different ones.
If you’re a small business owner who needs assistance with the tax process, the team at Sunrise can help. We have a Tax Assist program that specializes in helping small businesses sort through their tax forms and submit everything correctly. We even have a tax estimator to help you to determine how much you owe. Get started with our tools to avoid being overwhelmed by the tax deadline.