Goodbye 1096 and IRS Copy A, Hello E-File:
by Christopher Malott
Customers new to E-File Magic, often ask the question, “How do I print my 1096 and red Copy A forms?”. This is a good question and for those unfamiliar with E-File Magic’s software and services, is common.
You may be interested to know that by virtue of the services we provide, there is no requirement for producing and submitting either of these forms to the IRS. E-File Magic files everything electronically with the IRS, and all of our services include electronic filing. By filing electronically, the files we submit take the place of the Copy A and 1096 forms. This helps to simplify your work load and streamline your end of year reporting process. Ultimately affording you more time to focus on what matters most to you: your business and your customers.
Here are a few helpful items to remember as you prepare for the 1099*, 1098*, and 5498* filing season:
- Make sure you have downloaded and registered the E-File Magic software.
- Our E-File Magic 2.0 software formats all forms so they will fit in double windowed number 9 or 10 envelopes. You can order these envelopes from Staples for a very economical price. Click here to visit our web page which provides more information on our envelope and mailing formats. For your convenience we also print PostNET barcodes on each form to help simplify the mailing process.
- Identify and summarize all payments made in 2007 which require reporting to the IRS, and match those amounts with your recipients. It is also advisable to match these summaries with the totals the E-File Magic software produces on the Reporting screen.
We appreciate the opportunity to earn your 2007 business. Have a wonderful and safe holiday!
Advice from the Expert
by Sean Berry, CPA
The IRS conducted a nationwide conference call on November 28th regarding the reporting requirements for 1099 and 1098 forms. The purpose of this call was to provide basic information on Information Returns and e-filing. The IRS holds these calls from time and if you have an opportunity to participate in these conference calls, I would suggest you do so. You can find information on future calls on the IRS.gov website.
Towards the end of the call the IRS has a question and answer session. This presents an opportunity for you to pose any of those questions you feel you could use additional clarification on. During the most recent call there were a number of interesting questions and answers outlined that you might find useful while you prepare for this years tax season. Here are a few:
- Q: "Do I need to include in box 7 of 1099-MISC payments for merchandise?"
A: One IRS moderator said, "Yes" and the other said. "No" then they both said, "we will get back with you". Our research found that according to the IRS instructions, parts and supplies should only be reported if incidental to the services provided.
- Q: A question asked from by an attorney was whether he could issue a 1099-C (Cancellation of Debt) to clients who never paid their bill for services he had rendered.
A: The answer, "No, you may not issue a 1099-C". According to 1099-C instructions there is a list of who should file 1099-C; for the most part financial institutions, credit unions, others in the business of lending money, and Government agencies.
- Q: "As an issuer of 1098's, does one need to amend the 1098 (Mortgage Interest Statement) when there is an error in the reporting of Property Taxes Paid through escrow?"
A: Both moderators of the call said "No". They suggested, however, that a letter should be sent to recipient(s) informing them of the error and providing the correct amount.
A few additional items we feel you should keep in mind during the 2007 filing season:
- 2007 is the last year the IRS will accept tape cartridges.
- If you have 250 or more recipients, you MUST file electronically.
- The deadline for filing form 1099-MISC electronically is March 31st, 2007.
The IRS conference calls can be beneficial for increasing your understanding of the requirements and questions that are commonly associated with filing forms 1099* and 1098*. It’s one of many different ways the IRS communicates current issues, solutions, and initiatives. Please remember your business/situation is unique. When in doubt, consult your tax advisor and/or review the IRS’s website.
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Who We Are:
E-File Magic / 1099Magic
is your complete 1098, 1099, 5498, and W-2G print, mail, and IRS e-file solution.
Did You Know ?
E-File Magic 2.0 can print mailing labels. If you have opted to not use the standard number 9 or 10 envelopes the E-File Magic 2.0 forms are designed for, you can print mailing labels from the software and affix those to your envelopes.
Once you have imported/entered your data into the system and have validated it, navigate to the ‘Generate Reports’ screen, and select '5161-Avery', or '5162-Avery' mailing labels. Just feed your Avery brand mailing labels into your printer, and click the print button on the report screen.
Download Our Software:
Click here to download the latest version of E-File Magic 2.0.
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