By John Stylianou, Accountant
At the end of January, you will be receiving your information forms for 2006. These are the W-2s and 1099s you receive from employers, banks, and brokerage houses reporting wages, interest, dividends, and other types of income.
You should review these forms carefully before you file your tax return. Mistakes are more common than you might think.
Check that the numbers look reasonable. Compare information on the returns to year-end bank or brokerage statements or to your year-end pay stub.
Check that the name and social security number are correct.
Make sure you know what the information return is for and whether it is yours or not. In rare cases, forms can be issued to the wrong people.
It’s important to check the accuracy of the forms you receive because the IRS will computer-match the information on these returns to the numbers you put on your tax return.
If you find a mistake or think you have received an information form in error, don’t ignore it. Immediately contact the issuer and ask them to issue a corrected Form 1099 or W-2. The IRS should receive a copy of the correction, and you’ll avoid a red flag on your tax return.