5 Ways to Start Prepping for an Easier 2020 Tax Season
January 24, 2019
By: Rick Roddis, President of ComplyRight Tax Solutions, the leading manufacturer of 1099, W-2 and ACA tax forms, envelopes and software.
As you wrap up this year’s tax season, you’re probably breathing a big sigh of relief and tuning out all things tax-related for a while. But wait! While it’s OK to exhale and take a break, you shouldn’t swear off tax preparation until peak season. With a little attention and follow-through month to month, managing 1099, W-2 and ACA reporting in 2020 can be that much easier.
Here’s how to prepare for next year’s tax season:
1. Run a W-9/1099 report once a quarter – Don’t wait until January to discover you’re missing W-9 forms from vendors, which you need to complete 1099s. (You can obtain a signed W-9 before you make any payment of $600 or more to a vendor.) If you’re capturing this information in a spreadsheet or accounting software, trying to take this simple step every three months can help you verify you have the necessary details from vendors. When requesting W-9s, always try to document the date, contact and method of request for quick reference. The vendor must send a copy of their W-9 upon request or they could be fined $50 by the IRS.
2. Don’t file with the IRS the same time you send contractors 1099 copies – Often times, recipients will contact you after receiving 1099s to let you know their name, address or amount is not correct. For this reason, always try to keep at least a two-week difference. That way you can fix any errors in the 1099 forms before submitting final data to the government.
3. Doublecheck employee information for ACA reporting -- You need to try to be certain the following information is documented and up to date: employee names and Social Security numbers, dependents’ dates of birth and Social Security numbers, eligibility determinations, offers of coverage, and waivers (or opt outs) of coverage. It’s a good idea to remind employees to report any name changes due to marriage or divorce to your business, as well as the Social Security Administration.
4. Make a note of next year’s deadlines – You can create entries in your business calendars for next year’s deadlines for the 1099-MISC and W-2s: recipient copies by January 31, 2020, IRS paper filing by February 28, 2020 and electronic filing by April 1, 2020. We don’t know the due dates for next year’s ACA reporting yet, but if they mirror this year’s, they will be early March (which would be another extension) for recipient copies, late February for paper filing and late March/early April for electronic filing.
5. Consider upgrading to tax software or e-file -- These options securely store your IRS/SSA submissions so you can quickly do your taxes every year without having to start from scratch. E-filing also saves you time and money because it’s a dedicated, streamlined process. For example, it’s integrated with QuickBooks so you can upload payer and recipient data directly into the site and begin creating 1099s. Further still, you can confirm the information from payers and recipients with the “print preview” feature.
6. Take advantage of other modern, digital tools -- For added convenience and security, you can use programs like RightSignature, DocuSIgn, Hubdoc or Google Docs o have your clients sign documents, send payments, exchange files and more. E-signature software and cloud-based recordkeeping can help you move toward a digital, paperless office – a vital step toward saving space and working smarter.
Tax Reporting Solutions and Support Are Just a Click Away
With the right approach all year long, meeting your 2020 tax-filing obligations can be a snap. You can go to Office Depot Tax Forms for a full line of IRS-approved forms, envelopes, software and e-solutions from ComplyRight for your 1099, W-2 and ACA tax-reporting needs.
All content provided herein is for educational purposes only. It is provided “as is” and neither the author nor Office Depot, Inc. warrant the accuracy of the information provided, nor do they assume any responsibility for errors, omissions or contrary interpretation of the subject matter herein. The information should not be relied upon as replacement for professional tax advice.
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