24 Dec 2013

BMS has CaseLink Web clients covered this Tax Season

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CLW_batchPTrustee Tip:

BMS has CaseLink Web clients covered this Tax Season

January 21, 2014 Deadline to submit 1099 requests to BMS

Each year trustees and other fiduciaries are required to complete Forms 1099-MISC, 1099-INT and 1096 for each estate.  Forms 1099-MISC and 1099-INT are supplied to both the person you paid with estate funds so that they can report the income on their tax returns as well as to the IRS so that they are aware of these payments. These forms must be completed on IRS-approved stock, purchased either online or at your local office supply store.

Required Tax Forms

1099-MISC

Form 1099-MISC (Miscellaneous Income) is used to inform the IRS of money paid to professionals hired by the estate. A paper copy must be sent to each professional by January 31, 2014 if they meet any of the following conditions:

  1. At least $10 in royalties or broker payments in lieu of dividends or tax exempt interest,
  2. At least $600 in rents, services, prizes and awards, other income payments, and medical and health care payments,
  3. Any fishing boat proceeds,
  4. Direct sales of at least $5,000 of consumer products to a buyer for resale,
  5. Accrued wages, vacation pay, and other compensation paid to an estate or beneficiary after the date of death of a deceased employee,
  6. At least $600 in remuneration to independent contractors,
  7. At least $600 in remuneration to directors, or
  8. From whom you withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

A copy of each Form 1099-MISC must also be submitted to the IRS per the deadlines detailed below.

1099-INT

Form 1099-INT (Interest Income) is used to inform the IRS of interest paid by the estate. A paper copy must be sent to each party by January 31, 2014 if they meet any of the following conditions:

  1. For whom you paid interest of at least $10 (except for the $600 limit for interest paid in the course of your trade or business),
  2. For whom you withheld and paid any foreign tax on interest or from whom you withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

A copy of each Form 1099-INT must also be submitted to the IRS per the deadlines detailed below.

1096 Forms

Form 1096 is a compilation form that provides totals for all 1099 forms, including all 1099-MISC and 1099-INT forms that you submit to the IRS for hired professionals to whom payment was made during the previous year. A 1096 form is required for each estate only when submitting paper 1099-MISC or 1099-INT forms to the IRS per the paper filing deadline detailed below. If these forms are submitted electronically, then a Form 1096 is not needed.

IRS Paper vs. Electronic Filing Requirements

Paper Filing:

  • Must have less than 250 Form 1099s to submit to the IRS
  • Must include 1 Form 1096 for each estate along with your Form 1099s

Electronic Filing:

  • IRS offers an online filing system called FIRE (Filing Information Returns Electronically)
  • Required to file electronically if submitting more than 250 Form 1099s
  • Do not need to complete Form 1096

*Remember, the IRS does not provide a fill-in form option.

IRS Deadlines for Tax Year 2013

  • January 31, 2014: Forms 1099-INT and 1099-MISC must be furnished to the recipient.
  • February 28, 2014: Paper filing of Forms 1096, 1099-INT and 1099-MISC with the IRS
  • March 31, 2014: Electronic filing of Forms 1099-INT and 1099-MISC with the IRS

While many clients have their accountant generate these forms for them, we recognize that some of you may not work with an accountant on such matters and may need to print these tax forms in order to comply with IRS regulations for the estates you oversee. As part of the value-added service from BMS, should you need to generate 1099/1096s this tax season, please follow the process outlined in this article to supply your BMS Account Manager with the necessary information by January 21, 2014 to assist you in getting these tax forms ready.

Step 1: Identify 1099 Recipients in CaseLink Web

In order to assist you with preparing your tax forms, you will first want to verify that your Professionals have been flagged to receive a 1099 and that the TIN/SNN have been entered. To do this, enter the TIN/SSN and check the Claimant needs a 1099 (SSN/TIN) box when payment is made for each professional.

TIN1

Next, look in the Settings column of the check to ensure it reads Include on 1099. If it does not, click on the Edit icon and mark the transaction for 1099.

TIN2

Step 2: Print List of Professionals that need 1099s via CaseLink Web

1. Go to ReportsUST Forms and pick Form 2. Check the two settings marked below:

TIN3

2. Choose Multi Case, enter the Period Beginning and End range and choose Open Asset only.

3. Un-check all the options except for the last two: Exclude cases that were converted, dismissed or reassigned during the period and the Signed On date. Click Next to continue.

TIN4

4. When the Summary screen pops up, you may download Form 2.

5. Email this Form 2 to your BMS Account Manager who will be able to assist you in extracting the payments made to the Professionals listed in the report during 2013.

TIN5

Make sure to have all your UST Form 2 submitted to your Account Manager no later than January 21, 2014. This will allow enough time for your BMS Account Manager to do the necessary research to extract the payment information from your cases, have the forms generated and returned to you by January 28, 2014. You can then mail these forms out to your professionals by January 29th to meet the in-hand IRS deadline of January 31st.

Please contact your BMS Account Manager if you have any questions regarding your 2013 tax forms.

Are there any other IRS-related tips you want to learn about? Post your comments below.

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