09 Jan 2015

Get through the 2014 Tax Season by Generating 1099s through BMS software

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Get through the 2014 Tax Season by Generating 1099s through BMS software

February 2, 2015 Deadline to Supply 1099s

176603977Each 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 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. Refer to our article from last month with recommended item numbers that may be ordered from Staples.

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 February 2, 2015 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 February 2, 2015 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 2014

  • February 2, 2015: Forms 1099-INT and 1099-MISC must be furnished to the recipient.
  • March 2, 2015: Paper filing of Forms 1096, 1099-INT and 1099-MISC with the IRS
  • March 31, 2015: 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. Please review the instructions below for the specific type of BMS software you use in order to generate the 1099 forms properly:

How to Identify 1099 Recipients in CaseLink Office and TrustWorks

There are 3 ways to identify a payee so the total of the transaction can be included in the tax form totals.

  1. Each Repetitive Payee identity has an option to check the 1099 box.  This can be flagged so each time the payee is selected the payment is calculated towards the total amount printed on the form.
  2. Each claim screen allows the claimant to be flagged as a 1099 payee.  When claim is paid, it will automatically populate the check box.
  3. When paying individuals not listed in Repetitive Payees, users can check the individual ledger transaction to include value in the form totals.

Preparing 1096, 1099-INT and 1099-MISC Forms
To prepare the actual 1096 and 1099 forms in CaseLink Office and TrustWorks follow the steps below.

  1. From the home screen tool bar select Reports then Print Reports from the drop down menu. CLO_toolbar_Reports
  2. Find Accounts and scroll search for 1099 Forms on the drop down menu.

1099 Reports SS

The following list is a guide for each field that needs to be completed in the Parameters for 1099 Forms screen in order to complete the forms.

  • Trustee-Select Trustee number from the drop down box
  • Case-Enter the case number
  • Payee TIN-Enter TIN (for individual estates requiring TIN)
  • Date Range-Enter the Date Range for form (this should be 1/1-12/31 of year being prepared)
  • Form -Select the desired forms to Print (Form 1099-MISC or 1099-INT)
  • 1099-MISC (default threshold is $600)
  • 1099-INT (default threshold is $10)
  • Print– Drop down offers several selections

1099Parameters-OfficeSelect the Forms to print, and the number of copies. You can Preview before printing to check your cases and verify the data.

Tip: A new “Set Margins” feature is available in the latest version of CaseLink Office and TrustWorks to help you fine tune print alignment to match layouts on forms purchased from other suppliers such as OfficeMax or the IRS.

General 1099/1096 Troubleshooting Tips:

Disbursements made to payees must be flagged and the TIN/SNN populated to be included in the report results.   To verify your 2014 transaction history, you can use several tools to review disbursement data.

Some options include:

  1. View the disbursements using the Receipts and Disbursement Report. Set the date range to 1/1/2014-12/31/2014. Go to Options and filter by category codes, searching professional codes and 7990 INT codes.
  2. Run the Form 2 electronic files for the date range 1/1/2014-12/31/2014. Then filter by UTC code and look for the 2000-3000 codes. Also, search for 7990 codes to look for interest payments over $10.00.

Instructions for Preparing 1099s in CaseLink Web

  1. Go to Reports, Global reports and choose 1099 Professionals Worksheet.CLW-GlobalReports
  2. Use the Slider Bar (on the right side) to customize filters, Print options, and generate any export files. CaseLink Web helps the user identify corrections by displaying the yellow triangle icon. This icon identifies cases with missing information such as missing TIN/SNN.   You can correct those items within the 1099 Worksheet.CLW-1099ProfessionalsWorksheet
  3. You can click the plus icon to review each 1099 recipient record, and make updates and adjustments as necessary. Address information and Payee TIN/SNN can be updated from the screen.

CLW-1099RecipientRecord

General 1099/1096 Troubleshooting Tips:

Disbursements made to payees must be flagged and the TIN/SNN populated to be included in the report results. To verify your 2014 transaction history, you can use several tools to review disbursement data.

Some options include:

  1. View the disbursements using the Receipts and Disbursement Report. Set the date range to 1/1/2014-12/31/2014 while searching the professional codes and 7990 INT codes.
  2. Run the Form 2 electronic files for the date range 1/1/2014-12/31/2014. Then filter by UTC code and look for the 2000-3000 codes. Also, search for 7990 codes to look for interest payments over $10.00.
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