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As we approach the end of 2020, many are sighing with relief; however, if you are an accounting team member, you may be feeling stressed. The new requirement to report nonemployee compensation on the 1099-NEC form instead of the 1099-MISC is a major change that calls for advance preparations for year-end reporting. Preparing now will put you on the path to success for year-end reporting and compliance, so you can breathe a little easier at the start of the new year!
If you begin preparing in December, you will reduce your January stress and approach the new year with a strategy to complete the year-end reporting tasks timely. Here are a few items you should consider as the year-end approaches:
As this checklist indicates, establishing a calendar that contains all applicable deadlines and due dates will help keep the team on-task during this season. Consider making this calendar accessible to all members of the accounting team, so everyone is aware of the deadlines and can help meet or even exceed them. With your team on board and a plan of action, year-end can be stress-free!
Deadline |
Item |
2/1/2021 |
NEW! 1099-NEC Copy B for Nonemployee Compensation – VENDOR Copy* |
2/1/2021 |
1096 and 1099-NEC Copy A for 1099-NEC– IRS Paper or Electronic Filing |
2/1/2021 |
1099-MISC Copy B – VENDOR Copy* |
3/1/2021 |
1096 and 1099-MISC Copy A– IRS Paper Filing |
3/31/2021 |
1096 and 1099-MISC Copy A– IRS Electronic Filing |
* The IRS recommends providing these documents to employees as early as possible to reduce the number of filed corrections required.
There are several things that need to take place so that your 1099 forms can go out with ease. Below is a quick checklist to review for your Accounts Payable year-end processing.
The IRS is using a new Form 1099-NEC this year to report nonemployee compensation. Instead of reporting compensation that you pay to nonemployees (such as lawn care providers, office cleaning staff, and other independent contractors) on Form 1099-MISC in Box 7, that information will be reported on Form 1099-NEC. These updates affected data capture within Sage Intacct. In order to report your nonemployee compensation properly this year, you must update both the vendors and bills that were paid for these vendors during the 2020 calendar year. The steps below will guide you on these updates, if you have not yet completed this task.
You can also find more information on these updates in Sage Intacct’s article: “Migrate 1099-MISC Box 7 values to the 1099-NEC form.”
When reviewing your vendor records in preparation for year-end processing, check that you have received W-9 Forms from all of your vendors. If you are missing any, now is the time to reach out to obtain them.
It’s also a good time to confirm that you do not have duplicate vendors in your system. This can result in misreporting amounts on 1099 forms and may prevent population of a 1099 form for a duplicated vendor.
Now that your vendors have been reviewed, ensure that all of your 2020 invoices and payments are accounted for within your system. Finally, once the 1099 forms are issued, all payments should be recorded in 2020 or a Corrected 1099 form may be required.
If you are printing your 1099 forms in-house, order your forms early from www.formsforintacct.com so that you have them in time for printing to prevent unnecessary stress. Order plenty of forms to allow for errors – we all make mistakes and so do printers!
When printing, generate a copy on plain paper and compare to your forms to check alignment. If adjustments are needed, visit the Sage Intacct article titled “1099 print alignment” for guidance on updating the form alignment.
Sage Intacct will allow you to export the 1099 records to Excel, but does not provide any vendor form delivery or e-filing service for your 1099 Forms. Review the Sage Intacct Marketplace for options on e-filing, if interested.
Tax1099.com is a Sage Intacct Marketplace Partner that can provide IRS-approved e-file options for 1099, 1098, W2, and 940/941/944 filing. This tool has integrations with Sage Intacct and Bill.com software programs, which allows you to avoid duplicative data entry for 1099 processing.
Since Sage Intacct does not have a payroll solution, you probably have this area covered via a third party provider. However, below are a few important dates related to payroll for your year-end calendar.
Deadline |
Item |
2/1/2021 |
W-2 Form – Employee Copy* |
2/1/2021 |
W-2 & W-3 Forms – Federal Filing |
2/1/2021 |
940 & 941 Forms – Federal Filing |
3/1/2021 |
1094 & 1095 Forms – Federal Paper Filing |
3/2/2021 |
1094 & 1095 Forms – Employee Copy* |
3/31/2021 |
1094 & 1095 Forms – Federal Electronic Filing |
* The IRS recommends providing these documents to employees as early as possible to reduce the number of filed corrections required.
Closing your months and year within your accounting system is an important step in controlling your company’s books. This process is important, as it controls posting to prior months, so it limits dating errors. General Ledger closing for the year in Sage Intacct is essentially the same process as closing any other period. This task requires proper permissions within Sage Intacct and can be performed from the top-level or entity-level.
For fiscal years that operate in a different range than a standard calendar year, you must first create the reporting period.
For fiscal years that match calendar years, the reporting period is automatically created for you during the closing process.
Within Sage Intacct, you can close transactions in sub-ledgers for the appropriate "year ending" period. Periods that have not yet been closed should appear within the drop-down list in the Close window. To close sub-ledgers and the General Ledger together, go to General Ledger > All > Books > Close. As needed, close sub-ledgers (or summaries) for Accounts Payable (AP), Accounts Receivable (AR), Time & Expenses (TE), Client Expenses (CE), and Cash Management.
We hope this article helps ease the anxiety of the approaching year-end and allows you to begin creating a plan of action to accomplish your year-end tasks with ease! If you have questions about Sage Intacct or its functions, contact our team and we will be happy to help.