By David Hansen, CCH Washington Staff Writer

It won't be long now before you, as an employer, begin assembling various year-end tax materials, so you can get that information to your employees (and your accountant). Thus starts the annual income tax filing cycle.

In order to accomplish this task free of mistakes or omissions, the Internal Revenue Service (IRS) offers these suggestions.

Simple steps such as matching employees to their Social Security numbers can avoid many filing problems for W-2 and 1099 forms, revealed IRS and tax officials at recent briefing. They also warned of a few changes to the official forms.

Mismatching names and Social Security numbers is one of the most common W-2 filing errors, said Emily Rook, director of employment tax services for Circle Financial Services.

Writing dollar signs in the blanks for information is another, said Jason Fournier, an IRS tax law specialist. Scanners often misinterpret the information as the number eight. It has happened so often that the IRS changed its W-2 forms by printing dollar signs on information boxes.

Using fonts that are too large or too light are other common errors, said Fournier. He recommended using 12 point text size and Courier font script for filing returns.

In addition, excluding taxable income from forms--such as bonuses or use of a company car--is another error, noted Rook.

Mismatching names to taxpayer identification numbers is the most significant 1099 mistake, said Carole Barnette, a section chief with the miscellaneous tax forms section of the IRS's Wage & Investment Division. An example is when an individual does business in another name. The forms should list the payor or recipient's name for Social Security records first followed by the doing-business-as name.

Failing to write data clearly is another common error, she said. Putting numbers in the middle of boxes on tax forms is the top filing tip she recommended.

Additional W-2 Changes

The 2002 version of Form W-2 will expand in width from 7 inches to 8.5 inches, said Fournier. It will give the Social Security Administration additional space to scan boxes, he said. Box 12 for recording the taxable value of an employer-provided car was eliminated, he added. The information will now be recorded in Box 14 or in a separate statement to the employee.

As a final tip, the IRS noted that e-filers of W-2 and 1099 forms have an extra month to send all paperwork to the federal government, but must still get the forms to payees by January 31. This will enable employers to make any changes necessary to the forms once payees receive them, it added.

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