Ensuring Accurate 1099 Filings with TaxBandits TIN Matching API!

Managing the intricacies of tax filing is always challenging, especially if you are a business! There are a lot of aspects you should take care of — choosing the right form, completing the filing before the deadline, and, more importantly, reporting accurate data!

With so much data to handle, ensuring complete accuracy in the returns you prepare may not be as easy as it may sound. But, thanks to the emergence of many digital tools and services, the burden of ensuring accurate tax filings has been significantly eased. One such tool/service is TIN Matching!

TIN Matching — What is It?

It’s a preliminary validation procedure introduced by the IRS to enhance the accuracy of information returns filed.

The TIN Matching service enables you to ensure that the Name and Taxpayer Identification Number (TIN) you obtained through the W-9 Forms and report on your 1099 Forms match what the IRS has in their database.

If your business primarily revolves around independent contractors, this service can prove to be invaluable, considering the multitude of W-9s and 1099s you will deal with.

Enter: TaxBandits TIN Matching API

Handling the TIN Matching process manually can be daunting, especially with the large amount of sensitive information (TINs) you will be dealing with. This is when the TaxBandits API can come in handy. Unlike manual TIN Matching, which can be time-consuming and error-prone, TaxBandits TIN Matching API can provide a swift and efficient way to validate taxpayer data.

Key Features of TaxBandits TIN Matching API

• Scalability and Reliability — TaxBandits API allows you to validate a huge volume of TINs with the utmost accuracy, making it reliable for diverse business scales.
• Highly Secure — The API has all the necessary security protocols and mechanisms in place to process and store the PII data (TINs) securely. It even enables you to mask the TINs if required.
• Store and Use TIN Data for 1099 Filing — Once the TINs are validated, you can securely store these data in TaxBandits. At the end of the year, you can use these data against the respective Recipient IDs to file 1099s for them.

How TaxBandits TIN Matching API Works

The developer-friendly API seamlessly integrates TIN Matching into your W-9 automation process. This means you can subject the TINs collected from vendors through W-9s to TIN Matching right away before proceeding to 1099 filings. This proactive approach helps identify and eliminate discrepancies or irregularities right from the start.

• Once you integrate TaxBandits API, you can automate the W-9 collection from your vendors. There are two ways for that. You can either request your vendors to complete W-9s via email using the RequestByEmail endpoint (or) have them complete the W-9s on their own through an embedded secure URL using the RequestByUrl endpoint.
• While requesting any of these endpoints, you can opt for TIN Matching. If opted, the W-9s collected will be subjected to TIN Matching. Once done, the collected W-9s will be securely stored in TaxBandits, which can be used later for 1099 filings.

To learn more about W-9 automation, click here.

If you have already collected the W-9s from your vendors and just want to validate the TINs, you can do so by using the TinMatchingRecipients endpoint.

Configuring Webhooks for TIN Matching

TIN Matching results will not be available immediately and can take a business day. So, in order to keep track of the TIN Matching status of your W-9s, you must configure Webhooks in the developer console of the TaxBandits API.

Typically, the status of TIN Matching will be included in the Webhook response for Form W-9 or W-8 completion (if configured). Here are the steps to configure Webhooks for that:

• Log in to the Developer Console. From the Dashboard, navigate to Settings >> Webhook Notifications.
• There, you can select Add Webhook. You can choose the event type as Form W-9 Status Change / Form W-8BEN Status Change / WhCertificate Status Change.
• Then, add a valid Callback URL. TaxBandits will send a test notification to that URL, which should be received by a 200 response in order to get activated.
• Finally, provide a Notify email, which will be used by TaxBandits to notify you of any failed attempts to post Webhook notifications on the URL you provided.

In case you have opted solely for the TIN Matching service, you must configure Webhook for the event type TIN Matching Status Change.

TIN Matching Simulation

TaxBandits API offers a comprehensive Sandbox environment, allowing you to test various processes related to tax filing. Using that, you can simulate the TIN Matching process as well to understand how it works.

Typically, in Sandbox simulation, any TINs that end with ‘000’ will be rejected, and you will get the status ‘TIN Failed’. For all the other TINs, the status will be ‘TIN Success’.

For example, the EIN: 12–3456000 will fail in TIN Matching, whereas 12–3456789 will succeed in TIN Matching. Typically, the timeframe to get these results in Sandbox is 15 Minutes.

Conclusion

In the realm of tax filing, even a minute error can have a more significant impact on your tax compliance. So, it’s crucial that you make sure the information you report is as accurate as possible.

With TaxBandits TIN Matching API, you can easily validate the TINs before reporting and save yourself from potential penalties. Furthermore, proactively addressing discrepancies ensures a smoother and more accurate tax filing process.