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1099 forms are considered by the IRS to be informational returns. These forms are not to report income but to report types of payments that have been made. Companies must file these forms with the IRS as well as providing a copy to the person/s that have received the payments. The recipient of the 1099 is responsible in reporting the amounts as income on his 1040.

Types of Form 1099

1099-A: acquisition or Abandonment of Secured Property

1099-B: Proceeds from Broker and Barter Exchange Transactions

1099-C: Cancellation of Debt

1099-CAP: Changes in Corporate Control and Capital Structure

1099-DIV: Dividends and Distributions

1099-G: Government Payments

1099-H: Health Insurance Advance Payments

1099-INT: Interest Income

1099-LTC: Long Term Care Benefits

1099-MISC: Miscellaneous Income

1099-OID: Original Issue Discount

1099-PATR: Taxable Distributions Received From Cooperatives

1099-Q: Payment from Qualified Education Programs

1099-R: Distributions from Pensions, Annuities, Retirement Plans, IRAs, or
Insurance Contracts

1099-S: Proceeds from Real Estate Transactions

1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA

1042-S: Foreign Person’s U.S. Source Income

SSA-1099: Social Security Benefit Statement

SSA-1042S: Social Security Benefit Statement to Nonresident Aliens

RRB-1099: Payments by the Railroad Retirement Board

RRB-1099R: Pension and Annuity Income by the Railroad Retirement Board

RRB-1042S: Payments by the Railroad Retirement Board to Nonresident Aliens

W-2G: Certain Gambling Winnings

Summary of 1099 forms including types of amounts to report and due dates

To learn more about our 1099 reporting software, please go to www.realtaxtools.com .

The Minnesota department of revenue has released the 2010 Minnesota Withholding Computer Formula. The new formula is effective for wages paid beginning January 1, 2010 (supersedes any formulas before January 1, 2010).

Our payroll software automatically calculates Minnesota payroll taxes. A free demo of the software can be downloaded here: Payroll Software Download .

If you employ anyone who works in Minnesota or is a Minnesota resident and you are required to withhold federal income tax from the employee’s wages, in most cases you are also required to withhold Minnesota income tax. If you are not required to withhold federal income tax from the employee’s wages, in most cases you are not required to withhold Minnesota income tax. The rules for determining if you are required to withhold federal taxes are in IRS Publication 15.

You must withhold Minnesota income tax from the wages you pay employees and then pay the amount withheld to the Department of Revenue. You must withhold tax even if you pay employees in cash or give them other goods or services in exchange for working for you. Goods and services are subject to Minnesota withholding tax to the same extent they are subject to federal withholding tax.

To learn more about Minnesota Payroll Taxes, please visit the Minnesota department of revenue website.

To learn more about our small business payroll software, please visit www.realtaxtools.com

The first step to preparing a 1099 MISC form for a contractor is to determine this is the correct form to be filed. 1099 MISC forms are for services done by someone who is not an employee. The non-employee compensation must amount to $600 or more.

The second step is to determine if you will be filing electronically or filing paper forms. If you have more than 250 contractors you may be required to e-file. W2 Mate, a 1099 software, supports both electronic filing and the printing of paper forms (copies B, C, state 1 and 2).

If you don’t already have W2 Mate installed, you can download a free demo from the 1099 software download page .

Once W2 Mate is up and running:

1. Click company, on the toolbar, new company

2. Enter company information including 1096 form information

A. Business name, address, EIN and state ID

B. 1096 information is the person to contact and contact information and Filer’s name if different from the company

3. Click 1099 recipient >new recipient in this window enter recipient ID which is the social security number and the type of 1099 form (W2 Mate supports multiple 1099 forms including 1099 Misc, 1099 R, 1099 Int, and 1099 Div forms). The recipient’s basic information is entered in this window including name, address and social security number.

4. Click 1099 form in this window, on the right side of the screen, in this area you will enter the money paid to the contractor. The most common income will be entered in Box 7 non-employee compensation.

5. Some users may prefer to import their recipient information (optional feature). W2 Mate gives you two options importing a CSV file or importing directly from Quickbooks. This 1099 filing software allows the user to map the appropriate 1099 recipient information and/or gives you a step by step guide to import form Quickbooks.

6. It is now time to print 1099 Misc forms. Per IRS regulations 1099 Misc A and 1096 forms need to be printed to a red ink laser form. W2 Mate offers a package  that includes software and red ink laser forms called 1099 Kit. In the print options screen you can choose your recipients and choose which copy of the 1099 form to print. If printing to blank paper choose print a copy, in the drop down menu, choose the copy you wish to print. You may also print instructions on the back of the form. This form printing software allows the user print, email or e-file 1099 forms.

A. Printing 1099 forms- print to blank paper or use preprinted paper forms available individually or in complete sets.

B. Email 1099 forms- available for 2009 this 1099 software has an option which will create a password protected pdf file (optional feature) which can be emailed to the recipient. This option is available in the 1099 form screen. Select the folder to which you are saving the file, select the password option you prefer and choose the recipients.

C. Electronically file 1099 forms (optional feature) – W2 Mate generates the file the user will upload to the IRS to complete the e-file process. The IRS requires the transmitter to register for a TCC (complete instructions and links to the IRS in the 1099 software). Once you have registered you will fill in the form with the transmitter’s name, company and contact information. W2 Mate allows the user to e-file state forms if your state participates in this combined filing program. After you have chosen the output file you will log on to the IRS website and upload the file.

7. Click 1096 form, this window should be filled with the information you have already entered in the 1099 program. You will select the type of 1099 form to print then select print. Per IRS regulations you will print to a preprinted 1096 red ink laser form. A 1096 form is a transmittal summary of the included 1099 Misc forms.

1099 MISC Forms must be mailed to recipients no later than January 31st of the following tax year. The recipients receive 1099 Misc copies B and 2. The deadline moves back to March 31st if you electronically file the forms. The 1099 Misc A and 1096 forms are to be sent to the IRS no later than February 28th. If required 1099 Misc 1 is to be sent to the recipient’s state. 1099 Misc C is the payer‘s copy.

What’s new for tax year 2009?

A provision in the recently enacted 2009 Wisconsin Act 28 provides for a Wisconsin advance EIC payment. This provision is based on the federal advanced EIC.

An individual who expects to be eligible to claim the federal advance EIC and is a full-year legal resident of Wisconsin may request that his or her employer add to his or her paycheck an advance Wisconsin EIC. Wisconsin will be adding a field to the State, ‘RS’, record of the Social Security Administration’s EFW2 file specifications. The Wisconsin Advanced Earned Income Credit field will be a 10 digit field from position 298 – 307 of the RS record which is labeled in the EFW2 specifications as Other State Data. This field should be right justified and zero filled.

Effective January 1, 2009, Electronic Filing of Wage Statements and Information Returns for the 2009 earnings year (2009 Act 28, repeal and recreate sec. 71.80(20)), the filing threshold for the number of statements that must be filed electronically has been reduced from 250 to 50. Our W2 EFile software can generate EFW2 electronic files that include state information.

Also, employers that file their 1099s for Wisconsin payees to the IRS as part of the Combined Federal/State filing program must file those 1099s with the Wisconsin Department of Revenue if Wisconsin taxes are withheld. Our 1099 software can be used to E-File 1099 forms (1099-MISC , 1099-INT, 1099-DIV and 1099-R) with the IRS and with the state. You can also use our software to file on paper.

A free demo of our software can be downloaded by going to the W2 / 1099 Software Download Page.

Payroll Mate payroll software reminds employers and payroll tax professionals of the 941 deadline for the third quarter of 2009. Form 941 is due the last day of the month that follows the end of the quarter. 2009 third quarter 941 Form is due October 31, 2009 and includes payroll periods in July, August and September 2009.

Use Form 941 to report the following amounts.

• Wages you have paid.
• Tips your employees have received.
• Federal income tax you withheld.
• Both the employer’s and the employee’s share of social security and Medicare taxes.
• Current quarter’s adjustments to social security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance.
• Advance earned income tax credit (EIC) payments.
• Credit for COBRA premium assistance payments.

Preparing form 941 can be cumbersome and time consuming. A payroll system that includes payroll forms and reports can save business owners time and money. Payroll Mate generates and prints payroll form 941. If you don’t already use Payroll Mate, you can go to the payroll software download page to grab a free demo.