Practitioners with clients seeking to file their 2021 individual income taxes but who are missing crucial wage and withholding information needed for their return should be aware of the steps taxpayers should take if they never received or lost their Form W-2 or Form 1099.
Employers are required to send, by January 31 each year, Form W-2, Wage and Tax Statement, to employees and Form 1099-NEC, Nonemployee Compensation, to workers who aren’t considered employees. This year’s filing deadline is Monday, April 18, and the IRS has shown no indication that Tax Day will be extended due to COVID-19 as it was previously.
Taxpayers who don’t have their forms in hand come April may be worried about having to pay a late filing penalty, but filers have several ways to avoid an incomplete return.
First, a taxpayer who is waiting on a W-2 should contact their employer if the form wasn’t received by mid-February. A taxpayer waiting for a 1099-NEC should contact the person or entity they did work for.
For other income forms, including:
- Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
- Form 1099-MISC, Miscellaneous Income
- Form 1099-INT, Interest Income
- Form 1099-G, Certain Government Payments
The taxpayer should attempt to contact the payor before trying the next step.
Second, if the employer or other payor doesn’t comply or can’t be reached, the taxpayer can call the IRS at 800-829-1040 for assistance. Before calling, the taxpayer should have the following information ready:
- Their name, address, phone number, taxpayer identification number, and dates of employment
- Their, employer’s name, address, and phone number, and identification number (if known)
Considering the unprecedented high volume of calls to understaffed IRS customer support centers, taxpayers should contact the IRS sooner, rather than later.
The IRS will then attempt to reach the employer or payor to request the missing form, as well as send the taxpayer a Form 4852, Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., which the taxpayer would attach to their return if the IRS fails to retrieve records from the employer.
A Form 4852 should be filed if all else fails and the requested form is not obtained on time. A Form 4852 filer must include information on themselves, their employer, their Form W-2 or Form 1099-R information (to the best of their knowledge), how those amounts were determined, and what efforts were made to receive either form. The Form 4852 filing instructions recommend that taxpayers use information on their last paystub of the year.
If a taxpayer receives an original or corrected form after filing their return, they must amend their return by filing a Form 1040-X, Amended U.S. Individual Income Tax Return. If a taxpayer is seeking to file an amended return for a previous tax year and is missing that Form W-2 or Form 1099, the IRS’s Get Transcript tool can be used to request wage and income transcripts. To do so, a taxpayer should log into their existing IRS or ID.me account, or create a new account with photo identification. Other transcript types that can be requested include:
- Tax Return Transcript—shows most line items, including adjusted gross income (AGI)
- Tax Account Transcript—shows return type, marital status, AGI, taxable income, payment types, changes made to an original return
- Record of Account Transcript—combines the above two transcripts into one
- Verification of Non-filing Letter—indicates that the IRS has no record of a Form 1040-series tax return for the requested year
While a taxpayer can request transcripts for the most recent full tax year, they may not be available until July, according to the IRS. Requests for extensions to e-file tax returns can be submitted using IRS Free File, and must include an estimate of tax liability. Paper applications for extensions can be mailed via Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. If approved, the extended filing deadline is October 17, 2022.
Asked what suggestions it has for practitioners and preparers with clients who are missing a Form W-2 or Form 1099, the IRS referred to IR 2021-33, released in February 2021, as well as an official blog post in which Ken Corbin, head of the agency’s Wage and Investment Division, provides general filing tips for this tax season.
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