Utilize these 15 tips and tricks to handle your year-end filing with ease.
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Managing year-end filings is consuming for businesses. You need to understand complex compliance regulations, calculate payroll taxes, and stay updated with evolving laws and various IRS business forms.
Administering the right strategies can make this challenging process more manageable.
- Reconcile W-2s with Previous 941 Submissions: Match your quarterly 941 submissions with your annual W-2 submissions. Check wages under special programs and record voided checks and manual transactions correctly.
- Prepare for E-filing 1099s: Starting January 2024, you will be required to e-file your information returns if you file 10 or more. Greenshades makes this process easier with their e-filing solution.
- Verify Identification Numbers: Match social security and taxpayer identification numbers to avoid penalties. Use tools from your payroll provider for validation before filing.
- Adjust for Imputed Income from Benefits: Consider industry-specific calculations and allowances for employee benefits.
- Check the Social Security Wage Base: Align employee social security withholding with the current wage base.
- Use Correct 1099 Forms: Distinguish between 1099-NEC for independent contractors and 1099-MISC for other non-employee income.
- Complete W-9 Forms for Vendors: Determine withholding levels for vendors and contractors. Use backup withholding if necessary.
- Ensure Accurate W-4 Forms for Employees: Verify employee information on W-4 forms for correct tax deductions.
- Update Employee Access for Year-End Forms: Review your online access policies and offer digital distribution options.
- Streamline with Electronic Distribution: Enable employees to access forms online and sync with tax preparation software.
- Utilize Your Software Support: Take advantage of expert tax support from your payroll provider, like Greenshades, for your returns.
- Simplify Form Production: Auto populate year-end forms using data from your payroll provider.
- Set Up Tax Form Storage: Store forms securely for IRS inquiries. Consider Greenshades' seven-year archiving service.
- Remind Employees to Update Personal Information: Ensure accurate mailing addresses and personal details for smooth form delivery.
- Start Early: Prepare ahead of time for January filings to allow for adjustments and secure lower rates for print and mail services.
Keep informed about specific deadlines, including W-2 and 1099 forms, to effectively manage distribution and compliance.
- January 31: Distribute W-2 Forms to both the IRS and each employee. Submit a copy to the Social Security Administration (SSA), whether filing on paper or electronically.
- January 31: 1099 Forms are generally due to the recipient.
- February 28: If mailing, send copies to the IRS.
- March 31: For electronic submissions, send copies to the IRS.
Note: The 1099-NEC must be filed to all recipients by January 31. Other 1099 forms may have specific deadlines, which can be confirmed on the IRS website.
There are a few important changes to be aware of for year-end 2023. These include e-filing updates, the IRS made a switch from FIRE to IRIS, and changes were issued for forms used by Puerto Rico and U.S. Territories.
Starting January 2024, organizations filing over 10 information returns (like 1099, 1095-C, or 1042-S) must utilize e-file. This is an increase from the previous 250 threshold.
IRS Switch from FIRE to IRIS
The IRS is transitioning to the IRIS system to support the increase in e-filing, specifically for 1099 forms. This new system offers efficient e-filing in line with the latest requirements.
Note: Obtaining a Transmitter Control Code (TCC) is mandatory for this portal, unless you're working with a partner like Greenshades.
Update for Puerto Rico and U.S Territories
The IRS is merging Form 940/941 documentation for U.S. territories. From Q4 2023, Forms 941 and 941 (sp) will replace the 941-SS/PR version. Additionally, 2023 marks the end of Form 940-PR.
Delayed Changes to Form 1099-K
The IRS initially planned to revise Form 1099-K earlier this year but has postponed these changes to the 2024 year-end filing. Currently, Form 1099-K is applicable for reporting over 200 transactions exceeding $20,000. However, starting next year, the threshold will lower to $5,000, and the transaction count limit will be removed.
Social Security Administration and IRS Changes to Social Security Verification
The SSA and IRS have rolled out changes to the SSNV and TINV process. Due to these changes when running SSNV and TINV through Greenshades please allow for a 48 hour turn around time.
Starting TODAY clients are able to upload and process initial verifications through Greenshades Online Year-End Forms portal. Pre-validating this information will streamline your year-end reporting and year-end form distribution.
- Pre-Validation is available through Greenshades Online - Year-End Forms Portal - available NOW.
- Greenshades Tax Filing Center and Greenshades Dynamics Payroll Inspector will also allow the same SSNV process that will be available in January.
If you want to ensure you are licensed appropriately - please reach out to Greenshades Sales team.
If you are ready to begin the validation process - please reach out to Greenshades Support to get the process started!
Make Year-End Season a Breeze
Preparing strategically for tax season benefits your business by saving time, reducing costs, and minimizing stress. Stay prepared, have a well-defined plan for year-end forms, monitor deadlines closely, and utilize technology to streamline your tax preparation process.
With Greenshades, ensure precise and timely submission of W-2, 1099, and other year-end forms, with compliance checks and easy distribution options. For more resources on making year-end processes easy or to talk to an expert, contact Greenshades today!