Hello Lee:
Thanks for bringing this to our attention. While we are unable to promise a software update to address this for the 1099 tax form generation program this season, we can (and will) forward the idea to our engineers for possible future upgrades to our product line.
In direct answer to your question though, yes, it is perfectly okay to manually write an extra character or two onto the 1099-MISC before you hand them out to your independent contractors (and others). In truth, the IRS computers only will read the first few characters of either the payee or the payer lines for any 1099s about which they are notified, and so any information beyond that genuinely doesn't matter.
The IRS does its real document matching, you see, by Employer Identification Number (EIN) and Social Security Number (SSN), both for businesses and individuals, respectfully. These values would be shown in the payer's and the payee's identification fields on the printed 1099-MISC forms. They are, in fact, the most important items on the document, along with the dollar amount values.
We apologize for any inconvenience or trouble the 32-character name field limitation may have caused; and please know that your suggestion for improvement has been heard by the company. We will forward it to our engineers for further analysis, as indicated.
Please let us know if you have any other questions or concerns, and thank you very much for using TurboTax.
