02 Jan 2016

Make Your 1099s Sparkle & Shine in the New Year

0 Comment

new-years-resolution_Dec2014The beginning of the year feels like waking up to a brand new day—the slate of the previous year is wiped clean and we’re energized to start anew. This New Year put the right foot forward and make your 1099 forms sparkle and shine with a little help from BMS!

In this article, we’ll review:

Required Tax Forms

Each year, trustees and other fiduciaries are required to complete Forms 1099-MISC and 1099-INT for each estate, which highlight professionals (such as attorneys or law firms) that have been hired and the interest paid by the estate. These forms must be prepared on IRS-approved stock, which can be purchased online or at your local supply store.

View details for each form below:

1099-MISC (Miscellaneous Form)

The 1099-MISC form spotlights any professionals that have been hired by the estate, and totals all of the funds that have been paid to these professionals. A paper copy must be supplied by February 2nd to each professional whom you have paid during the year:

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

1099-INT (Interest Income)

The 1099-INT form showcases all of the interest that has been paid by the estate. A paper copy must be supplied by February 2nd for each party:

  • To whom you paid interest of at least $10 (except for the $600 limit for interest paid in the course of your trade or business)
  • 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 amount paid

1096 Forms

The 1096 Form totals all of the funds and interest from the 1099-MISC and 1099-INT forms that will be submitted. This form is only required to be completed if you are submitting paper versions of these forms, and must be included for each estate. The form is not needed if you are submitting 1099 forms electronically.

 

IRS Filing Requirements

You can submit the required tax forms in either of two ways: by sending in paper forms, or submitting them electronically.

Paper Requirements:

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

Electronic Requirements:

 

IRS Deadlines for Tax Year 2016

  • February 1, 2016: Forms 1099-INT and 1099-MISC must be furnished to the recipient.
  • February 29, 2016: Paper filing of Forms 1096, 1099-INT and 1099-MISC with the IRS.
  • March 31, 2016: Electronic filing of Forms 1099-INT and 1099-MISC with the IRS.

 

Generating 1099s in BMS Software

While many trustees and fiduciaries work with an accountant to tack together these forms, it is also possible to use your BMS software to generate and finish your forms to pristine perfection. Check out tips for each software platform, below!

Generating 1099s in CaseLink Office and TrustWorks

Step 1: Identify 1099 Recipients

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 toward the total amount printed on the form.
  2. Each claim screen allows the claimant to be flagged as a 1099 payee.  When a 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 values in the form totals.

In CaseLink Office and TrustWorks, you are able to generate 1099 forms within the software itself. Now, you can also access the 1099 Worksheet to help you to pinpoint which cases need 1099 Forms.

To access the 1099 Worksheet, click on the ‘Reports’ tab in the Main Menu toolbar, then click on ‘Accounts.’ CLO_toolbar_Reports

Under Accounts, select the 1099 Worksheet from the ‘Print Reports’ screen. This will open the ‘Parameters for 1099 Worksheet’ screen, shown below.

1099_WS

Fill in the appropriate fields, then select Preview or Print to view the list of cases that will require a 1099 form to be generated.

Step 2: Prepare 1099-INT, 1099-MISC and 1096 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
  3. This will open the Parameters for 1099 Forms screen, shown below. 1099-1

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 – Enter Payment Threshold and copies (default threshold is $600)
  • 1099-INT – Enter Payment Threshold and copies (default threshold is $10)
  • Print – Drop down offers several selections

You can also Preview before printing to check your cases and verify the data.

General 1099/1096 Troubleshooting Tips

Disbursements made to payees must be flagged and TIN/SNNs must be populated to be included in report results.

There are several ways you can verify your transaction history, including:

  • View disbursements using the Receipts and Disbursement Report. When creating the report, set the date range from 1/1/2015 – 12/31/2015. Then, go to Options and filter by category codes, searching for professional codes as well as 7990 INT Codes.
  • Run Form 2 electronic files for the date range 1/1/2015-12/31/2015. Filter by UTC Code and look for 2000-3000 codes. To find interest payments over $10,000, look for 7990 codes.

Generating 1099s in CaseLink Web

Step 1: Identify 1099 Recipients

The 1099 Professionals Worksheet in CaseLink Web can help you to determine which cases need a 1099 Form to be sent to the IRS. To access this report, choose ‘Reports > Global Reports’ from the global menu at the top of the screen, then click on the ‘1099 Professionals Worksheet’ listed under the Professionals column heading.

1099-2

You will now see a list of professionals. Use the slider bar on the left side of the screen to filter the list, view print options, or generate any exported files.

CLW-1

Step 2: Prepare 1099-INT, 1099-MISC and 1096 Forms

  1. Before you print out the forms, pay special attention to the TIN and W-9 columns in the resulting list of 1099 recipients. Records with incomplete information such as a missing TIN/SSN or unsigned W-9 will display a gray “X” instead of a green check mark in those columns. You can make corrections for those records by clicking on the plus icon to review each 1099 recipient record and updating the information accordingly. Address information and Payee TIN/SSN may be updated from this screen. CLW-2
  2. You may also refine the list of payees by clicking on the Filters tab located in the left side bar.
    CLW1099Filters
  3. Once all corrections have been made, simply click on the Print* tab located in the left side bar, adjust any print parameters and click the print button to print onto IRS-approved 1099 form stock. The Print tab will even list the exact order and quantity of forms you need to load into your printer.
    CLW1099PrintTab
  4. Alternatively, if you wish to export the data to send to your accountant or other third party to print out the 1099 forms, you may click on the Export tab in the slider bar to generate such a file.

* The IRS has made slight changes to the 1099 forms for the 2015 tax year. Please wait until Tuesday, January 19, 2016 to print 1099 forms through CaseLink Web.

General 1099/1096 Troubleshooting Tips

There are several ways you can verify your transaction history, including:

  • View disbursements using the Receipts and Disbursement Report. When creating the report, set the date range from 1/1/2015 – 12/31/2015. Then, go to “Options” and filter by category codes, searching for professional codes as well as 7990 INT Codes.
  • Run Form 2 electronic files for the date range 1/1/2015-12/31/2015. Filter by UTC Code and look for 2000-3000 codes. To find interest payments over $10,000, look for 7990 codes.

We hope these tips have shined an easier path for you in completing your tax forms. If you have any questions, please reach out to us at support@bmsadvantage.com.

[top]