The Most Common Filing Errors Employers Notice During Tax Season
Each filing season brings familiar challenges for filers as they prepare for filing Form W-2, Form 1099-NEC, Form 1095-C, and other required forms. Even in well-organized companies, errors may occur when form formats change, instruction updates are overlooked, or data records aren’t updated.
The points below reflect recurring filing issues that organizations frequently encounter. They are informational in nature and may help prompt internal reviews or planning discussions ahead of peak filing periods.
- Issues with Recipient Details
Most IRS rejections occur because of formatting issues or name/TIN mismatches on the summary form, rather than data on individual forms. However, in many cases, the IRS will mark a form as erred if a name and TIN combination does not match their records. These result in required corrections rather than a full filing rejection.
While addresses don’t cause errors or rejections, keeping address information up-to-date is important as furnishing recipient forms is a requirement.
Reviewing recipient details for consistency across payroll, HR, or third-party sources can help reduce the chances of needing updates once filing begins.
- Outdated Instruction References
IRS forms and instruction sets are revised from time to time, and occasionally employers rely on materials prepared for prior seasons. Even small adjustments in instructions may influence reporting methods, definitions, or eligibility references.
Checking the most recent version of the official form instructions may help clarify changes that developed since the last filing cycle.
- Variations in Compensation Categories
Items like overtime, bonuses, commissions, reported tips, or certain fringe benefits are all forms of earnings, but they are not always shown in the same way on informational forms. Some compensation is reported as taxable wages, some appears under specific boxes, and certain items may have separate reporting considerations based on IRS instructions.
Because of that, many organizations review how different earnings types are categorized in their internal records before generating forms, simply to help ensure that each item ends up in the correct place during filing.
Maintaining clear internal notation for compensation categories can be helpful in supporting consistent treatment during filing periods.
- State-Level Filing Considerations
Some states maintain separate filing requirements for filings. These may include direct submissions, additional forms, or different deadlines.
Organizations that operate in multiple states often review whether any state-level reporting applies in addition to federal filing. Checking state requirements for required forms before the tax season starts is always helpful.
- Filing Timelines and Correction Windows
IRS and state filing deadlines can vary depending on the form and, sometimes, payment types. Failing to file by the deadlines can lead to hefty penalties.
After submission, a filer may find that they have errors on some forms. These errors should be corrected ASAP, but there’s not a deadline for corrections. Rejected filings have 60 days to be fixed and resubmitted.
Keeping track of deadlines, filing statuses, and tax updates can help filers avoid penalties.
- Document Retention Practices
In some circumstances, organizations may be asked to provide records regarding their filing, such as receipt ID, recipient form furnishing proof, and confirmation of acceptance.
Maintaining organized and accessible record systems can be useful for reference purposes if questions arise about prior filings. Tax filings and records should be kept for a minimum of 4 years.
Conclusion
Most filing errors are small, such as missing or invalid data, using outdated instructions, or not filing on time. Even though they’re small, they add up quickly and can create huge fines.
By doing some additional data-validation, reviewing instructions, and keeping documentation, filers can avoid the most common issues filers face when submitting Form 1099-NEC, Form 1095-C and Form W-2.
Disclaimer: This content is informational only and not tax, legal, or accounting advice. Consult a qualified professional for guidance on specific filing questions.
