24 Dec 2013

It’s Tax Time Again – Generate 1099s through BMS software

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CLW_batchPTrustee Tip:

It’s Tax Time Again – Generate 1099s through BMS software

For CaseLink Office and TrustWorks Users

Annually, trustees and other fiduciaries are required to complete Forms 1099-Miscellaneous Income, 1099-Interest Income 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 from a variety of online retailers 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. Individuals 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. Individuals or entities for whom you paid interest income 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 income 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

If these forms are submitted electronically, then a Form 1096 is not needed.

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(s) for Forms submitted to IRS electronically 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.

IRS Paper vs. Electronic Filing Requirements

Paper filing

You may paper file forms if the estate:

  • Has less than 250 Form 1099s to submit to the IRS
  • Includes 1 Form 1096 for each estate along with your Form 1099s

Electronic Filing

You may file forms electronically to the IRS if the following applies:

  • 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

*Any person, including trustee and estate who files more than 250 forms per calendar must file electronically

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 must be filed with the IRS
  • March 31, 2014: Electronic filing of forms 1099-INT and 1099-MISC must be filed with the IRS

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

1099 Parameters SS

In order to Print you must choose one of the options from the drop down menu:

  • Print 1099 only
  • Print 1096 (case summary ) forms only
  • Print both 1099 and 1096 forms

Using the 1099 Worksheet

This worksheet is a great prep tool to use. It will help you troubleshoot when you prepare to complete forms on the official IRS approved stock.

  • Trustee– Select Trustee number from the drop down box
  • Case- Enter the case number or –All- to run for all cases
  • Date Range– Enter the Date Range for form (this should be 1/1-12/31 of current year)
  • Report Type– Summary or Detail
  • Payment Threshold– Enter value
  • Export- 1099 data can be exported to Excel after Preview or Print

Troubleshooting Options:

  • Show Only Transactions with no TIN
  • Show Only When TIN or Print 1099 Don’t Match Claim
  • Combine Payments from all Cases
  • Ignore TINs (grouping by payee only)
  • Show Only Payments with the “Print 1099” Box not checked

Payee/TIN-Enter search criteria

1099 Worksheet SS

Early preparation will ensure your forms are filled out properly and filed in a timely manner with the IRS – avoiding any penalties. Please contact the BMS Support Center (800-634-7734, ext. 6 or email) or 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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