1099-MISC/W-2 Reporting Info

  • Form 1099-B: What You Need to Know

    1 July 2015
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    A 1099-B form is a form that is issued by a broker in order to give an overview of all transactions made regarding stocks, bonds, mutual funds, and securities, as well as any gains or losses. All of these stock transactions must be reported to the IRS in order to successfully file your taxes. A 1099-B form must be reported for each sale your stock transactions make. If you choose to create a consolidated tax statement, it is possible that you would see more than one sale if that is what your records show. Compare your records with the 1099-B form so that you know all information is correct.

     

    What is Included in a 1099-B Form?

     

    A brokerage firm or barter exchange must report all stocks, contracts, commodities, securities, and anything else that he or she has sold for liquid cash. Each transaction must be reported on its own individual form for the IRS. The guidelines for a 1099-B form have change slightly in the past few years; for example, both short-term and long-term sales must be reported, which was not the case a few years earlier. Brokers and barter exchanges should remember that they do not have to report anything from organizations who give to others, IRAs, corporations, and the like, all of which is explained on the IRS’s government website.

     

    Why Do I Need a 1099-B Form?

     

    The IRS requires investors and brokers to report the original value, or cost basis, of financial securities for the last taxable year. A cost basis is defined as the value of an asset, such as stocks, bonds, mutual funds, or commodities that needs to be reported in order to file taxes. It is important to report the exact amount of expenses and income for the most recent taxable year; otherwise, you could end up owing the IRS too little or too much in taxes. Just like any other form that needs to be filed for tax purposes, the 1099-B form requires the broker or barter exchange to provide information about each client including their Social Security number and sales made with that person.

     

    Forgetting to Report a 1099-B Form

     

    If you are a broker, you will send the 1099-B form to each of your clients for them to fill out for you. If you are a client, be prepared to fill out a 1099-B form for each taxable year you are working with your broker. It is important to get your 1099-B form turned in before the deadline, however if you forget to report your 1099-B form or are delinquent in returning it back to your broker, the IRS has guidelines on how to deal with that. The IRS requests that anyone who has forgotten to file a 1099-B form fill out an amended tax return using the 1040X form. This form is used to report the correct amounts that would have originally been on your 1099-B form. You should turn in the amended tax return as soon as possible in order to avoid any penalties or additional fines from the IRS.

     

    When you are ready to file your 1099-B form, use WageFiling to make it easy for you. With a simple and user-friendly interface, WageFiling can help you upload, fill in, and send off all the documents you will need to report for the most recent taxable year. You can also look back on old forms and save them for your records so that you always stay organized and in control.

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  • 1042-S reporting: What is it?

    25 June 2015
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    A 1042-S form is a form issued by the IRS used to report payments made to foreign employees or students who are subject to income tax withholding. Anyone who is subject to income tax withholding is still help responsible for turning in a 1042-S form even in the event of a tax exemption or if no payments were issued. The 1042-S form, also known as the Foreign Person’s US Source Income Subject to Withholding, is used to report income and income tax withholding for the most recent taxable year.

     

    Who Needs One?

     

    Foreign employees and international students who are not considered residents, but rather non-resident aliens working in the United States must fill out a 1042-S form because they are subject to income tax withholding. Any document ranging from rent and income to pensions and royalties must be reported on a 1042-S form for each individual non-resident alien.

     

    For students, anything related to university expenses such as scholarships, grants, awards, or fellowships that were not considered part of their income must be reported on a 1042-S form. A 1042-S form can be considered similar to a W-2 form that American employees must fill out with their TIN and SSN, as well as other personal information in order to complete tax filing.

     

    What to Do

     

    The 1042-S form can be filed as a paper copy or electronically, however doing it electronically will keep your record straight and will be much faster to complete. In addition to the general information that could also be found on a W-2 form for Americans, those filling out a 1042-S form must also include the reporting of payments made and amounts withheld under what was previously known as the Foreign Account Tax Compliance Act (FATCA). This general information will usually include material such as taxpayer identification number for foreigners, Social Security Number, date of birth, and other additional information. This is a new addition to the 1042-S form, which was added at the beginning of 2014.

     

    The 1042-S form also requires that the name and employer identification number (EIN) of the withholding agent who withheld the tax from the foreign employee be reported on their 1042-S form. A withholding agent is someone who has control of the income of a foreign employee who is subject to income tax withholding.

    Common Mistakes to Avoid

     

    Whether this is your first time filling out a 1042-S form or not, remember to take your time in order to avoid common mistakes. You should read all information so as not to skip over anything important or leave any part blank that could result in a penalty.

     

    Be honest, as failing to report proper income amounts or additional information can also result in a fine or penalty. Lastly, in order to complete your 1042-S reporting form, rely on previous forms that you had filled out for your employer to make the process go a lot easier.

     

    Filing your 1042-S form online is easy with WageFiling. WageFiling is an e-filing website that helps you keep all reports and documents in one place so that you can refer back to old forms and use them to fill out new ones. WageFiling makes it easier to file your taxes and even sends off the forms once they are completed so you do not have to worry about printing them out and mailing them yourself.

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  • 4 Reasons to Use a Web-Based Reporting Service

    17 June 2015
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    Reporting services are an important part of the tax filing process. Without this step, you could lose some direction on where your funds are going. A reporting service is meant to help a company finish their tax filing process in a simple and organized way so that in the future past records are easily accessible for both the company and the IRS or the SSA. Reporting services that are web-based have many more benefits than reporting services that cannot be done online.

     

    Faster Delivery

    When you file your W-2 and 1099-MISC forms, you should also be reporting the files to the IRS and the SSA in order to keep track of money paid. If you choose to do your reporting with QuickBooks, you are adding in an extra step to your tax filing process. QuickBooks does not offer a reporting feature for submitting these forms to the IRS or SSA. To do so with QuickBooks, a person would have to go to an office supplies store, buy specific QuickBooks forms and special envelopes, and then mail the forms to the recipients, the State, and the IRS. On the other hand, Wage Filing is totally paperless and easy to use; you can do all of your filing and reporting at once, which means the delivery of documents is received much faster. You will not have to worry about paying a penalty if you forget to send the reporting forms in either because Wage Filing will make sure they are sent as soon as you are finished.

     

    More Flexible

    With a web-based reporting system, you have a few more options than with QuickBooks W-2 reporting. After entering and filing your forms, you have the option to print the forms from your computer instead of on special paper and envelopes. Then your forms are e-filed to the IRS or SSA as soon as you are ready to purchase and send them. After all the hard work has been done, you have the option to save reported files for your own personal records by saving them as a PDF or document, or printing them out. This is a more flexible way to get your taxes filed instead of having to stick to a certain process. Wage Filing also lets you save information so that once you enter forms the first time you do not have to do it all over again next year.

     

    Cost Efficient

    QuickBooks 1099-MISC forms can get expensive to file if you are constantly making a trip to your office supplies store. Because it requires you to buy special envelopes and print out all documents, you are spending money on the paper, stamps, envelopes, and filing fee. File with Wage Filing instead and save yourself a lot of money, as well as being kind to the environment by choosing a paperless method.

     

    Easy to Use

    Unlike 1099-MISC QuickBooks forms, Wage Filing makes it easy to file your taxes and report the forms using a web-based reporting service. In addition to having a user-friendly website that is easy to navigate, Wage Filing walks users through the entire process. After creating an account online, you can enter the forms accordingly, as well as file a correction, file your forms from past years, and check your Taxpayer Identification Number (TIN). They also offer links to first-time users about how Wage Filing works and an FAQ page in case you have questions about the process.

     

    Web-based reporting systems have been proven to make tax filing a much simpler process without all of the stress. Start your tax filing today with Wage Filing; they will be able to help you should you be stuck on any forms, as well.

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  • The Differences between an Employee and a Contractor: Tax Forms

    10 June 2015
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    Knowing how to tell the difference between issuing a W-2 form and a 1099-MISC form can be a little confusing, especially if you are part of a company that deals with many different types of workers. However, knowing which worker is an employee and which one is a contractor is important for your business so that you know which form to send in for each. There are a few differences between an employee and a contractor; all of which will make it easier on you to understand the tax filing process.

     

    The Type of Work Issued

    An employee will work under one boss and will do his or her job based on the duties they are expected to perform. The employee’s boss will provide on-the-job training, as well as dictate what the employee’s responsibilities are. The contractor works independently from the company and will usually have many clients or employers at once. A contractor can move from company to company when needed and sets his or her own work hours. Contractors can be hired to do extra side work for a business without receiving the benefits given to an employee, such as health benefits or time off. A contractor can also be considered his or her own boss, which means they follow their own guidelines and do not take direction from the company that hired them unless stated otherwise.

     

    Ongoing Service

    Whether an employee is working for a company full time or part time, they are putting in ongoing service to a business with set hours and hourly pay or annual income. A contractor provides service for a definite amount of time, after which their services to the company are done. They can come back to the same company for more work, but it is considered a new service contract and not a continuing one. Contractors will be paid either all at once or on commission, unlike most employees.

     

    Independence

    An employee will have no independence from the company, which means that they are responsible for all of their actions. An employee’s actions and attitude will reflect back onto the business, so it is important that they act the way the company wishes to be seen by others. A contractor is completely independent from the company they are working for, which means they are not responsible for any actions beyond the service they have provided. However, that does not mean that they can treat the company that hired them badly; the quality of their work will reflect the company’s image.

     

    Reimbursements

    It is common for a company to reimburse an employee for any business related expenses. These expenses usually include travel expenses like food, lodging, and transportation, among other things. Business expenses can be reimbursed for the company, which can end up benefitting them. As long as business expenses stay within the IRS guidelines, a company can reimburse the employer or employees for any expenses made and collect the deductible. A contractor is not working under the company, however, so he or she must pay their own fees.

     

    Using these differences can help a company figure out which form to fill out for their employee and contractor. Once they are ready to file the forms, they can go to Wage Filing’s website for a systematic process.

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  • Real Estate Agents and Their Assistants: What are Your Financial Obligations?

    3 June 2015
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    The real estate market is an ever-growing business with clients always looking for a real estate agent to help them find a home or office. One of the best features of being a real estate agent is that there is always a need for an agent to help a person look for the right property, especially as clients are becoming increasingly frugal with their money. However, it isn’t always easy to find a real estate position, which can be especially true for those without much experience. With that said, real estate agents are starting to hire assistants to help them take on some of the workload. Real estate assistants can be at the agent’s side as they show potential buyers properties, as well as assist with paperwork.

     

    Accounting

    Both the real estate agent and their assistants have financial obligations that they must adhere to in order to keep their business up and running. One of the most important obligations real estate agents must uphold is accounting. They must account for all documents and transactions made between agent and client; this is where the help of the assistant might come in handy. If a real estate agent is the one making the sale, the assistant can take the time to record all transactions for tax purposes. The real estate agent must also track all funds and account for their location. They cannot combine business funds with client funds, or take client funds and add it to their personal account, which is considered unethical.

     

    Documentation

    Documenting all transactions and tax deductions keeps a real estate agent and his or her assistant organized and able to easily recall past records if needed. The IRS has guidelines for deductions on taxes, which must be followed in order for wage tax filing to be done correctly. If a real estate agent hires an assistant, he or she must document any payments made for their records and report all payments to the IRS on a 1099-MISC form. The agent must also report any commission payments made to an assistant since there will be times when they will be of assistance beyond the office, at functions like open houses and showings.

     

    Wage Tax Filing

    Once all documentation has been organized, it is time for the real estate agent to file 1099-misc for real estate assistant. Agents can do so online at Wage Filing’s site, which makes it easy for small businesses to prepare and file taxes quickly and without stress. Real Estate Payroll information can instantly be entered online before the business chooses to fine 1099-misc real estate agent. Then they can print an IRS-approved copy of their documents for their personal records and send off the federal tax forms for the low price of $3.49. Wage Filing is the only owner-operated e-filing system for 1099-MISC and W-2 forms.

     

    Financial obligations for real estate agents and their assistants also include monthly expenses, as well as expenses that must be made in order to get their real estate business up and running. That being said, it does not have to be difficult to get taxes filed. With Wage Filing, the time it takes to file taxes is cut in half thanks to their cutting-edge technology, which does all of the hard work itself. They take the stress right out of the tax filing process.

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  • 1099-MISC Deadline is March 31

    23 March 2015
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    Avoid the real March Madness and file your 1099-MISC to the IRS before or on March 31, 2015 to avoid late fees and penalties.

    If you fail to file a correct 1099-MISC return by the due date and you cannot show reasonable cause, you may be subject to a penalty. The penalty applies if you fail to file timely, you fail to include all information required to be shown on a 1099 return, or you include incorrect information on a return. The 1099 penalty also applies if you file on paper when you were required to file 1099s electronically, you report an incorrect TIN (Tax Identification Number) or fail to report a TIN, or you fail to file paper 1099 forms that are machine readable. The amount of the 1099 deadline penalty is based on when you file the correct information return. The penalty is:

    $15 per information return if you correctly file within 30 days (by March 30 if the due date is March 2); maximum penalty $75,000 per year ($25,000 for small businesses).

    $30 per information return if you correctly file more than 30 days after the due date but by August 1; maximum penalty $150,000 per year ($50,000 for small businesses).

    $50 per information return if you file after August 1 or you do not file required information returns; maximum penalty $250,000 per year ($100,000 for small businesses).

    So keep that winning bracket money in your pocket and file now!

    Scott Zubrickas profile
    Scott Zubrickas has 20 years of experience working directly with the IRS on form regulations, requirements and electronic filing as an Authroized e-file Provider. He is a Member of WageFiling, LLC in Grand Rapids Michigan and handles business development and IRS compliance updates. To keep up on W-2/1099-MISC reporting changes that effect your business without all the legal jargon you can follow Wagefiling on Facebook and Twitter

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  • Do we file a 1099-MISC to an LLC or large Corporation?

    31 January 2015
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    Who To Send A 1099-MISC Form To?
    Posted by Tom Taulli (@ttaulli) operates MasterCFO, which provides income tax preparation and tax problem resolution for individuals and businesses.

    I recently got the following question from a tax client: “Last year I paid $1,000 to someone to build my website. But his business is an LLC. I heard that I do not have to send a 1099-MISC form to a corporation. So I have no requirement here?”

    Nope. He must send a 1099-MISC form to the developer.

    As you can see, the rules can be confusing – and sometimes far from clear cut.

    So what to do? Well, here are the steps I go through with a client:

    Step 1: The payment must be $600 or over per year for services, not goods, and it should be done in the course of your trade or business.

    Example: Suppose you hire a contractor for $10,000 to remodel your house. In this case, there is no need to send out a 1099-MISC form because the work was for personal purposes. However, if it was to remodel your office, then you will need to send one out.

    Step 2: Generally you do not have to report 1099-MISC forms to C Corporations and S Corporations. But there are some exceptions:

    Medical and health care payments (such as for pre-employment physicals)
    Fish purchases for cash
    Attorney’s fees
    Gross proceeds paid to an attorney (such as for legal settlements)
    Substitute payments in lieu of dividends or tax-exempt interest
    Payments by a federal executive agency for services

    And what about an LLC? Well, you will need to send out a 1099-MISC form — regardless if the exceptions apply or not.

    Step 3: The person who provides the service must not be an employee. Instead, he or she must be classified as an independent contractor. The bottom line: Do you have the right to control and direct how the work is done?

    True, this can be fuzzy. So if you are not sure if a person is an independent contractor, you should seek out professional advice, such as from an attorney. I also have some other factors to consider when making the evaluation, which you can find in the following post.


    If you’re ready to issue a 1099-MISC head over to www.WageFiling.com where you can prepare, print and e-file 1099-misc instantly without forms or software.

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  • 2015 Filing Deadlines Clarified

    29 January 2015
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    The deadline for filing your W-2 and 1099-MISC forms is coming up quickly, and we’re here to help you meet your deadlines. Let’s take a quick look at what those due dates are and talk a bit about how you can be sure to hit them with time to spare.

    January 31st or February 2nd?

    January 31st is the due date for sending recipient copies to your employees (W-2) and contractors (1099-MISC). However, since January 31st falls on a Saturday this year, you have until the following business day to send those out. That means this year’s forms must be postmarked by Monday, February 2nd.

    March 2nd or March 31?

    If you choose to file paper forms with the IRS and Social Security Administration (SSA), you’ll need to have those forms in the mail by March 2nd. But if you choose to file electronically, using WageFiling’s service, you actually have some extra time to get those forms filed. Choosing to file electronically means you have until March 31 to file with the IRS and SSA.

    WageFiling handles recipient copies and filing with the proper agencies all in one step. When you file electronically with us, you’ll be able to print recipient copies or even choose secure PDFs to send along to your employees and contractors. Also, you can e-file your forms now, to make sure your recipient copies go out on time, and we guarantee to file with the IRS and the SSA on time when the time is right.

    Click the Start Filing link to get started today!

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  • Green Business Bureau and WageFiling team up for tax season

    8 January 2015
    125 Views

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    We’ve teamed up with Green Business Bureau this tax season to help bring awareness to paperless W-2/1099-MISC filing this month. With every business in the nation required to report employee and contractor wages millions of forms are purchased, used once and disposed of. With our service users can enter their W-2/1099 data online, instantly print IRS approved recipient copies on plain paper or as a secure pdf to email and we e-file to the IRS/SSA and State.

    Thus eliminating the need for forms, special envelopes, postage or software and eliminating a TON of paper waste. A portion of all sales will go to help plant trees in urban areas around the nation in our users name. Please email us if you use the service and we’ll add you to this list!

    The Green Business Bureau and IzzitGreen are always working to bring their members services and products that will help their business save money and operate in a more sustainable manner. In addition to their certification process they are committed to bring multiple benefits to you through savings on products, green knowledge sharing, Green Rewards from IzzitGreen, and more. Learn more about how you can green your business by visiting them at www.gbb.org

    WageFiling Team

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  • W-2/1099 Forms are dead, so sad

    18 December 2014
    213 Views

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    Every year, businesses in the United States must report wages paid to employees and contractors, a process that includes visiting the office supply store to buy traditional pre-printed W-2 and 1099-MISC forms and compatible envelopes and software, usually only available in larger quantities than you need. Once you have the forms back at the office they have to be printed, stuffed and mailed to the recipient, state and federal agencies all by January 31. This costs the average business filing for 10 employees about $300 in time and materials each year. The IRS also increased the penalties for late filing by $100 per person in 2014.

    You can avoid all the hassle without leaving your desk and complete your filing for just $3.49 per person. At WageFiling.com our web-based system allows you to enter your data online and instantly print IRS-approved recipient copies on plain paper (or save as a secure PDF) and we electronically file your data to the IRS, SSA and states that participate by the established filing deadlines, guaranteed! No forms, no software, no hassle. Your account data is stored securely year after year for easy access and filing.

    This year you can even save on stamps with the new IRS regulation called SSN Masking. SSN Masking protects the identifying information found on those forms by hiding the first five digits of the SSN or EIN with an X. So whether you email these forms or send them using the postal service, you can be confident you’ve done your part in protecting your workers’ identities from being stolen.

    WageFiling has been a Quality Supplier to the IRS since 1996 and the only owner-operated service on the market. We stand behind our product with an outstanding support team with IRS and tax experience. We even provide bilingual support for our Spanish-speaking customers.

    Get in touch with us over the phone, email, or live chat whenever you have a question, and we’ll be glad to help.

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