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Where e-filing information return forms comes full circle. We support 1099, 1098, W-2, and Affordable Care Act forms.

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2021 Drafts for 1099-NEC and 1099-MISC

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Over 1,000 drafts for 2021 tax forms are now available through the IRS website. The 1099-NEC and 1099-MISC drafts for tax year 2021 have been released. Both forms are for reporting non-employee compensation, but recent updates have spelled change in the process for reporting. For more information about filing the 1099-NEC, check out this article. Form 1099-NEC Changes for 2021 Though this form was renewed for the 2020 tax year, there won’t be many changes for the 1099-NEC in tax year 2021. Most of the changes were to the form’s design and to revise dates for the next year.  It is worth mentioning, this addition to Instructions for Recipient Box 1: “Note: If you are receiving payments on which no income, social security, and Medicare taxes are withheld, you should make estimated tax payments. See Form 1040-ES (or Form 1040-ES-NR). Individuals must report these amounts as explained in these box 1 instructions. Corporations, fiduciaries, and partnerships must report these amounts on the proper line of their tax returns.” Form 1099-MISC Changes for 2021 The 1099-MISC form for 2021 has not been changed in terms of design or appearance, with the exception of dates being updated to reflect the tax year 2020. The instructions for 2021, however, have removed the following note under the “Amounts shown may be subject to self-employment (SE) tax”: “Note: If you are still receiving payments on which no income, social security, and Medicare taxes are withheld, you should make estimated tax payments. See Form 1040-ES (or Form 1040-ES-NR). Individuals must report these amounts as explained in the box 14 instructions on this page. Corporations, fiduciaries, or partnerships must report the amounts on the proper line of their tax returns.” Another change to the Instructions for Recipient section is the removal of all mentions of the form 1040-SR, and other sections are mow omitting mention of form 1040-NR as well. Further changes to Box 5 instructions were made. Rather …

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Types of 1098s and When to Use Them

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There are close to 1,000 forms related to federal income taxes, and seven different types of 1098 forms. There are seven different types of 1098 forms, each with a different purpose and importance. Let’s run through each form and what they’re used for. 1098 This form is a Mortgage Interest Statement. Your mortgage company will send you this form if you paid at least $600 in mortgage interest. 1098-C This form is for Contributions of Motor Vehicles, Boats, and Airplanes. If you donated a car, boat, or airplane worth more than $500 to a charity, you can take a charitable deduction for your contribution using this form. 1098-E This form is a Student Loan Interest Statement. Your lenders must give you this form if you paid at least $600 in qualified loan interest. 1098-F This form is for Fines, Penalties, and Other Amounts. If you paid any of the following, you’ll need to include them on this 1098 form: court-ordered fines, penalties, restitution, or remediation. However, these payments are not typically tax-deductible. 1098-MA This form is for Mortgage Assistance Payments. You’ll use this form when you received or paid any homeowner assistance payments through a state Housing Finance Agency. If you meet certain requirements, you could potentially deduct those payments. 1098-Q This form is for Qualifying Longevity Annuity Contract Information. This contract is from a certain type of retirement account, and the 1098-Q is where you’d report these payouts. 1098-T This form is a tuition statement. The recipient may claim education credits if he or she paid tuition to an eligible higher education institution, like a college or university. 1098 forms are given to anyone who has been engaged in any of the abovementioned financial transactions during the tax year. When you receive these forms, it’s always a good practice to make sure all information reported – even VINs, social security numbers, etc, - is correct before you file your …

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Types of 1099s and When to Use Them

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The most common 1099 forms are 1099-MISC, 1099-INT, 1099-DIV, 1099-K, 1099-B, 1099-G, and 1099-R. There are more than a dozen different types of 1099 forms, each with a different purpose and importance. Let’s run through each 1099 form and what they’re used for. 1099-A This form is for Acquisition or Abandonment of Secured Property. This is typically used when property has been transferred due to foreclosure. 1099-B This form is for Proceeds from Broker and Barter Exchange Transactions. It is used by brokerages and barter exchanges to record customer gains and losses in a tax year – stocks, commodities, regulated futures contracts, foreign currency contracts, forward contracts, debt instruments, options, securities futures contracts, etc. 1099-C This form is for Cancellation of Debts. Lenders and creditors file this form if a debt of $600 or more has been canceled. 1099-CAP This form is for Changes in Corporate Control and Capital Structure. This form is used to report shareholders who have received cash, stock, or other property through an acquisition or other significant change in structure of capital. 1099-DIV This form is for Dividends and Distributions. You must file this form if you own stock or securities and receive more than $10 in distributions like dividends, capital gain distributions, or nontaxable distributions paid on stock and liquidation distributions. 1099-G This form is for Certain Government Payments. Use this form to report unemployment compensation, state and local income tax refunds, agricultural payments, and grants that are taxable. 1099-H This form is for Health Coverage Tax Credit (HCTC) Advance Payments. This form is used to report advance payments of qualified health insurance payments for the benefit of eligible trade adjustment assistance (TAA), alternative TAA, re-employment TAA, or Pension Benefit Guaranty Corporation (PBGC) payees and their qualifying family members. 1099-INT This form is for Interest Income. …

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3 Tips to Avoid Penalties and Filing Errors

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There are more than 40 types of information returns that the Internal Revenue Service (IRS) requires to be filed. Information returns are vital to reporting and verifying income tax in the U.S. and matching individual tax returns to determine compliance. Filing the correct returns in a timely manner is contingent upon having correct information to remain within compliance. Failure to file on time or with incorrect information may result in penalties charged to taxpayers (if they don’t immediately make the correction) or you, the preparer, for failure to comply with an information reporting requirement. Some errors are easier to fix than others. The IRS penalizes based on the size of business, type of failure and tardiness of filing. Avoid errors and potential penalties with these tips: File by the due date. Business tax returns are due based on your business type and most information forms are required to be e-filed or mailed by a specific date every year. Missing the due date for your business tax return will cost you. The penalty is five percent each month the return is late and can be a maximum of 25 percent. If you file more than 60 days after the due date, the minimum penalty is $135 or 100 percent of the tax return. For sole proprietors and single-member LLCs, penalties and fines are based on the amount underpaid or paid late and will not stop accruing interest until the balance is paid in full. → Takeaway: Don’t panic if you cannot pay the full amount of taxes you owe. Submit your return on time and pay at least 90 percent of the tax due to avoid a penalty. Even with an extension, you must estimate how much you owe, if anything, and send in that amount by the due date. Ensure correct spelling and Tax ID Number (TIN) The IRS penalizes for reporting incorrect taxpayer ID on information returns. If the (TIN) is incorrect or missing, the taxpayer is subject to backup withholding and you’ll get a backup withholding notice. → Takeaway: …

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7 benefits of using an online & authorized IRS e-file provider

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What sets authorized IRS e-file providers apart from other businesses and individuals who say they can e-file for you? We'll discuss this and the benefits of using an authorized IRS e-file provider whose services are available online only. An "authorized IRS e-file provider" is a business or individual that is authorized by the IRS to electronically file taxpayer returns. This provider can either be a local business, online business (like eFile360), or a business selling an e-file software, but for the focus of this article, we’ll discuss the benefits specific to online businesses.  According to the IRS, a business is recognized as an "Authorized IRS e-file Provider" when it is “accepted to participate in the electronic filing (IRS e-file) program.” Since the IRS maintains the highest standards for e-file providers, this designation is important and shows that the business promises to “protect the integrity and security of the electronic filing system” as well as the security of the taxpayer’s information.  Here are 7 benefits of choosing to use an online and authorized IRS e-file provider: Eliminate mistakes  Complete a variety of forms quickly  Last-minute filing  Customer service assistance Repurpose last year’s data  No need to purchase paper forms in bulk  No administrative and IT costs  Eliminate mistakes  An authorized IRS e-file provider will help you eliminate mistakes in your Information Return forms before you submit them using the bulk upload option and the TIN Check add-on. The bulk upload option allows you to upload a large amount of data at once using a formatted Excel spreadsheet. If you use eFile360, we provide you with a unique Excel spreadsheet template specific to our bulk upload option in our e-filing system. You can copy the data from your accounting software into this template, which eliminates manual mistakes. Another way to eliminate mistakes on your forms is to utilize the TIN Check add-on service. …

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How to choose an e-file provider in 7 steps

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Do you need to choose an e-file provider for your Information Return forms? We break the process down into 7 simple steps. There are many e-file providers out there. Some are local while others are online. Some involve downloading software while others are completely online. How do you choose one? Go through these 7 steps and you’ll narrow down the vast options quickly.  Find what forms they support. Learn how their service works and what it includes.  Discover when their deadlines are. Figure out when they provide customer service.  Determine if they offer e-delivery and TIN Checking.  Compare costs. Test them. Step 1: Find what forms they support. Your business operates in a specific fashion with a unique number of employees and contractors or vendors. How your business operates will determine what forms you need to submit come tax time. When choosing an e-file provider, it’s important to check that they work with all the forms you need. This helps you organize your forms as you work on them, access them later on, and reuse data next year.  Trying to use multiple e-file providers for a similar service can be time-consuming and frustrating. That’s why eFile360 supports a variety of forms to meet your needs, including 1099, 1098, W-2, and ACA forms. Visit this page to see all forms supported.  Step 2: Learn how their service works and what it includes.  Each e-file provider works a little differently, so it’s important to compare their services. Find out if their service requires that you download software, visit a specific location in-person, or go to a specific website. Which option appeals to you more? Once you determine where you need to go, learn what their service includes. Do you need E-file + Print & Mail, E-file Only, or Print & Mail Only? If you don’t do any filing of Information Return forms in your office, you will likely need the E-file + Print & Mail option, which most e-file providers offer. But what …

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