1099s

The 1099 season tends to get hectic quickly, especially if you do not prepare ahead of time.

• Update your software
  Make sure you are on the latest version of the software. Pak Accounting releases end-of-year updates to tax forms and tables, so watch for these notifications. Once you receive the notification that there are release updates, make sure to install them. Go to Utilities > Global > WolfePak Download.
• Are you filing Electronically or by paper transmittal?
  • If filing electronically- if this is your first time filing, make sure you request your TCC code from the IRS in plenty of time. It can take up to 45 days to receive your TCC code. Also, remember, if you are filing 1042s for foreign withholding, you must acquire a separate TCC code from the IRS than the one you use for filing 1099s. To file for your TCC code, file Form 4419, “Application for Filing Information Returns Electronically (FIRE)”. See IRS.gov for more information.
  • If filing paper- make sure to order your paper forms and envelopes in plenty of time. 
  • Revenue Owner Tax ID’s
    One of the biggest struggles at year-end is ensuring you have Tax IDs for your 1099 Recipients. We all know this can be overwhelming, especially if you pay thousands of owners throughout the year. Pak Accounting has some tools to help you out with this.
• The first tool Pak Accounting provides is the Print Owners with possible problems report. This report prints, if selected, during the Pre-Check reports for each revenue/billing cycle. The owner will no longer show on this report once you enter the Tax ID into the Sub-Account maintenance > Revenue/Billing tab > General tab > 1099 Options Tax ID. We recommend running this report with your monthly distribution cycle and correcting missing Tax ID’s as soon as possible. Waiting until the end of the year to correct this can cause delays, as receiving this information from the owner can take a while.
• The second tool Pak Accounting offers is the TIN matching report that is available during the 1099 process. You do not have to wait until the end of the year to verify your Tax IDs through this process. However, you must extract your 1099’s (AP, Rev, or both) before creating the file. This report will also show you any missing Tax IDs, which the report does not include in the file created to send to the IRS. TIN matching enables you to check the TIN (Tax Identification Number) provided by the payee against the name/TIN that the IRS database contains PRIOR to filing 1099's. This process helps avoid TIN errors and reduces the number of backup withholding notices. It is also a service provided for free by the IRS. See Publication 2108A located at http://www.irs.gov/pub/irs-pdf/p2108a.pdf for complete details.

Please see the client portal for training videos and webinars on the 1099 process. If you do not have access to the client portal, please contact the Customer Success Team.

Payroll

Checklist for W2 Processing:

1. Review Company/Transmitter information for accuracy.
2. Extract W-2 amounts from employee's historical information.  
3. Assess Year-End Data including Printing the Edit Listing  
4. Make any known corrections. (W-2 Menu - Employee Maintenance)
   1. NOTE:  Information such as the employee's name, address, social security number are located in two different places; on both the employee master and W-2 Employee Maintenance.
5. Correct the error(s), if any, that are listed.  Check the totals.
6. Repeat steps 4 and 5 until there are no errors.
7. Print W-2's to be mailed to the employees before February 1st.  

• Payroll- Social Security numbers:
  • This field will be printed on the TWC quarterly report listing and the W2s at year-end. Suppose you enter a social security number already in use by another employee. A warning message will appear in that case, and you must enter a different social security number (or all zeros) to continue. You can enter zeroes when an employee's SSN is not received to allow the company to file W2s with the SSA. For employees with zeroes, a warning message will be displayed on the W2 Edit Listing, with a message to correct either now or send a corrected form from the SSA website once the SSN is received.
• Create SSN Verification File—This report will create a file to upload to the Social Security Administration (SSA) Business Services Online (BSO). It allows registered users to verify employees' names and Social Security Numbers (SSNs) against SSA records.

Please see the client portal for training videos and webinars on the W-2 process. If you do not have access to the client portal, please contact the Customer Success Team.

General Ledger

You may make entries to the new year without closing the old year first.

• Change the Posting Allowed Dates in Company Maintenance to allow entries to be made in the new year.
  1. Select Posting Allowed under Master Files Maintenance.
  2. Change the Posting Allowed Date to the new year and Save (F10).
     1. Single User / Multi-User With No Security
        • Simply enter the new date in the "Thru" field for all classes utilized.
        • If all users are Class 1 users, the feature is considered off and uses the one date range set in Posting Allowed.
        • Note that you will still see the Class 2 and Class 3 "From" and "Thru" date fields even though they are not being utilized.
          - OR -
     2. Multi-User With Security Enabled Using All Three Classes
        • Contact the system administrator for your organization to initiate the change.
        • The system administrator should then change the "Thru" date in each class per company policy in keeping with internal controls.
• Notes:
  • Balance forward entries will automatically be generated for the next year. This is a required process; please let it complete before closing the system. The system automatically maintains balance forwards as new entries are posted to prior years.
  • If you still need to post entries for the prior year, for example, you can enter a beginning date of "12/01/2022" and the ending date as "12/31/2023". This will prevent you from accidentally entering entries for January 2023 as of January 2022.
  • You cannot open more than 13 months from the current system date forward in the Posting Allowed date range. You can post entries in prior periods but not forward past 13 months.

Year-End General Ledger Clean Up
Remember, Pak Accounting does not do a hard close at the end of the year. Balances automatically roll forward at the end of the year when the posting allowed date range is changed. Even so, this is still the perfect time to do a bit of year-end maintenance on your general ledger. Best Practice is to review the following monthly and/or quarterly, but you should at least consider these items at year-end.

• Write Off Bad Debt—Review any outstanding accounts and write off any bad debt.
• Reconcile A/R and A/P accounts—make sure that all open A/P items are, in fact, still open and unpaid, and review A/R balances to ensure correct tax reporting.
• Write off penny balances from Unpaid/Unbilled Report – This report is found in Revenue/Billing > Reports > Property > Unpaid/Unbilled. You can also run this report as an option when updating your Revenue/Billing cycles. Penny balances are typically caused from rounding differences in the cycle. Pak Accounting recommends writing these pennies off at the end of the year.
• Write off Penny Balances in Deleted Interest Accounts – Review the Billing and Revenue Deleted Interest accounts and write off any penny balances that sometimes occur due to rounding. Consider researching anything more than a few cents, as this could mean you did not bill/pay owners correctly.
• Write off small balances in your Purchaser Clearing account and any other clearing accounts you may use.
• Payroll - Depending on your company's policies, you may want to zero out your sick leave and vacation accrued and/or balance amounts. To zero out you must go to Payroll > Year End > Zero Sick Vacation.
• Revenue/Billing
  • Reconcile Suspense: Run the Revenue/Billing > Reports > Suspense > Suspense vs. GL Balance report to see if your suspense is in balance. If you are out of balance, this report will help you try to identify the entries that could be causing the issue.
  • Flush Suspense: During your last revenue cycle of the year, or if you run a special cycle, use the Flush option on the Revenue/Billing Cycle > Revenue tab. This will automatically pay suspense if it is above your minimum flush amount as set in the Company Maintenance > Pty Susp/Net tab.
  • Start Unclaimed Property Process

Resources

• 1099/W2 Training Videos- Found in Freshdesk
• Year-End Webinar
• Pak Accounting Splash Screen
• Pak Accounting’s Forms Department
• Your CPA or Tax Accountant