Tax Software Can Ease Form-Filing Burden
If you run a small business that pays consultants or contractors, then 1999 means it’s time for 1099s and W-2s.
1099 forms are used to report miscellaneous income paid to individuals who are not employees, while W-2s are used to report wages, withholdings and other information for employees. Both must be mailed or delivered by Feb. 1 and submitted to the Internal Revenue Service by March 1.
If you have only a few forms to fill out, you may be better off doing it by hand. The pre-printed forms are available at most office supply stores. However, if you have many to do, it might be worth buying a software program that does most of the work for you.
1099 Pro Inc. of Calabasas (https://www.1099pro.com or [818] 876-0200) has programs to help both large and small businesses with these tax chores. The company’s signature product, 1099 Pro ($199), is aimed at companies with 30 or more employees or payees. TaxPro 8.0 ($69.95) is designed for smaller firms.
1099 Pro allows you to input all the tax information via your PC, then make professional-looking copies without the need for pre-printed forms. All you need is a laser printer and some blank paper, and it does the rest.
The one exception is so-called Copy A, which gets filed with the IRS. The agency requires those copies to be printed on IRS-approved forms. Just pop those imprinted forms into your printer and 1099 Pro can take care of that too.
Remember, if you have 250 copies of any one form to fill out, then you must file electronically. Here you have two choices.
You can file directly with the IRS free of charge. However, you’ll need to use special software and get a “transmitter control code” from the IRS.
Or you can pay a so-called service bureau to do it for you.
1099 Pro offers a service that can help with that as well. For 25 cents a record, with a minimum charge of $70, it will electronically ship all your data to the IRS.
For most small companies, the 1099 Pro software probably is overkill. However, the company’s other program, TaxPro, just might fit the bill. It doesn’t have as many bells and whistles as 1099 Pro, but costs a lot less and it creates the forms most businesses use.
This easy-to-use program creates 1099-MISC (miscellaneous income), 1099-INT (interest income) and W-2 forms. Although the program generates all the information you’ll need for the forms, it can’t print them to blank paper like 1099 Pro. You’ll need to use pre-printed forms that you can purchase from office supply stores. Or you can order them directly from the software vendor’s Web site (https://www.1099pro.com/plist.htm).
If you have just a few forms to complete, or if you don’t already have employee or payee data in electronic form, you can simply fill out the form on-screen. Filling out a 1099 form takes only a few seconds, since there isn’t all that much information to enter.
A W-2 is a bit more complicated. The interface is a lot like the forms themselves, so if you’ve ever completed a form by hand, then you’ll know how to do it with this program. If you don’t know what to do, the program’s help system will guide you through each step.
Once you’ve completed the forms, you can print them out on the pre-printed stock and you can generate a printed report for your files.
If you already have your data in electronic form, you may be able to import it into the software. Like 1099 Pro, the program accepts some data from Quicken (the payees’ name and address but not financial data) and is able to import all data from DacEasy. It also can import standard text files that you can generate from Excel and some accounting programs.
In addition to printing the forms themselves, the program generates a variety of reports for your records. It also prints the IRS 1096 transmittal form that accompanies 1099s, W-2s and other forms that go to the IRS. Like the 1099s and W-2s themselves, these must be imprinted on approved IRS forms that you run through your printer.
E-Z Legal Forms Inc. (https://www.e-zlegal.com or [800] 822-4566) offers a less robust and less expensive W-2 and 1099 generator called W2 Maker. This Windows program doesn’t import data but lets you quickly enter information on screen and prints it to the same pre-printed IRS approved forms as TaxPro.
If you haven’t been there lately, consider visiting the IRS Web site (https://www.irs.gov). You can get just about any form you need from the site, which also includes instructions and plenty of other information for small businesses and other taxpayers.
The IRS will let you download 1099 and W-2 forms to look at or practice on, but you can’t use them. You must write, type or print on the pre-printed IRS approved forms. That, however, is not true with all tax forms. Some of the forms you download from the Web site can be printed out, filled in and submitted. The IRS site also has some useful information, including “Recommended Reading for Small Business” at https://www.irs.ustreas.gov/prod/bus_info/reading.html.
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Lawrence J. Magid can be reached via e-mail at larry.magid@latimes.com.
