Ask the Tax Expert

Johanna GargBlog, Tax0 Comments

Q: How do I void a 1099 that was electronically filed with the IRS. I filed the same form twice in error. Should I create a VOID form with all the same amounts?

A: In order to void out a duplicate 1099 filed in error, you will need to file a new 1099 with the IRS with the “CORRECTED” box checked at the top.  Fill in the information exactly as it appears on the 1099 you want to void, but put $0 for all of the money amounts instead.

Q: All of my employees have received their W-2s and are filing their individual income tax returns.  But, oh no!  I realized that there is a mistake on one of my employee’s W-2s.  How do I fix that? 

A: If you see a mistake on a W-2 -whether it be incorrect wages, taxes, name, SSN, etc- the first step is to contact us at customerservice@dominionpayroll.com to process the adjustment or correction.  Once the processing is completed, the W-2 in iSolved will be immediately updated with the correction and you can advise your employee to pull their new W-2 if they receive them electronically.  If your employee does not receive their W-2s electronically, you will need to request a re-printed W-2.  Shortly after, you will be contacted by the Tax Department about processing of tax amendments, if applicable.

Q: Why is tax contacting me about amendments?  I thought everything was already fixed in iSolved!

A: The Tax Department has already filed all Q4 2022 returns and year-end reconciliations so if your taxes change, amendments are necessary to “update” the appropriate tax agencies with your corrections otherwise it will not match with the W-2s filed by your employees.  A discrepancy can lead to a tax notice, and we don’t want that!

Q: Will my employee need to receive a W-2C and amend their individual income tax return?

A: W-2s were filed by the Tax Department on January 24, 2023.  If your correction was processed on or after this date, the Tax Department will provide you with a W-2C that you should distribute to the affected employee.  If your employee already filed their individual income tax return, they will need to file an amendment.  If they have not yet filed their tax return, then they can just use the updated amounts on their W-2C when filing their return.  When electronically filing, your employees will not need to indicate that they have a W-2C.  However, if they still file by paper they should include a copy of their W-2C along with the original incorrect W-2 with their paper return.

Q: What can I do to ensure that my taxes are paid timely and in full going into the 2023 new year?

A: Every year starting in November (sometimes as early as October!) tax agencies will send out unemployment rate updates, withholding frequency updates, and other updates about your accounts that are pertinent to ensure accurate filing and paying.  As soon as you receive these, forward them to Dominion Payroll at tax@dominionpayroll.com so that as soon as 2023 starts, we can file and pay at the correct rates and frequencies.  This will result in no under-payments, no missing returns, and NO delinquent notices!  That means a stress-free 2023!!

Q: I do forward my tax rate and frequency update notices as soon as I get them, but sometimes I still get delinquent notices.  What is going on?  Are you not paying my taxes?

A: Check to ensure that we have all your account numbers.  In iSolved, go to Reporting > Report Archive and under Output Item for the most recent payroll, select “Exceptions – Invalid Tax ID” and View Report.  It will show you if we are missing any tax IDs.  As technology progresses, most tax agencies have adopted electronic mandates for both returns and payments.  Dominion Payroll cannot abide by these mandates unless they have the correct account numbers on file for you as returns and payments cannot be sent electronically without an account number that is associated to your FEIN.  YES- this means that for a lot of state agencies we cannot file or pay on your behalf because the state will not accept even paper returns or check payments!

No account number can cause a ripple effect with your taxes.  For example, if we do not have your account number for VA unemployment in 2023 Q1, then your Q1 return may not be processed and payment may not be accepted, which incurs penalty and interest.  If you provide your account number before we file Q2, we can file and pay Q2 accurately, but some of the Q2 payment will be used to pay the penalty and interest on Q1, which will leave Q2 underpaid… and then Q2 will incur penalty and interest!  In addition, if the agency has not finished processing the Q1 return by the time we file Q2, taxable wages in Q2 may superficially be increased since no taxable wages were processed yet in Q1.  This will cause the agency to bill additional tax on taxable wages that should be there in the first place!

Therefore, to avoid any ripples originating in Q1, please ensure that we have all the necessary information needed to process your taxes accurately so that you can sit back, relax, and enjoy the New Year!

Q: I’ve looked into the Report Archive – Output Item – and Exceptions. I do not have option to select “Exceptions – Invalid Tax ID” as recommended in the answer to the question above. Is that a problem? I also have not received any updates from “tax agencies sending out unemployment rate updates, withholding frequency updates, and other updates about your accounts that are pertinent to ensure accurate filing and paying.” Is this a problem??

A: If you do not see “Exceptions – Invalid Tax ID” in your Reports, then your accounts are all set!  That report will only appear if you have accounts that are missing account numbers or have incorrectly formatted account numbers (i.e. you provide us an account number that is 9 digits, when it should be 10 digits per the agency).

If you are not receiving rate updates or frequency updates, please contact the agencies to ensure that your mailing address is up-to-date.  The IRS will change your mailing address based on the address shown on your most recently filed return, but states agencies generally do not.  So if you move, make sure you let those state agencies know!

 

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