Version Information

The current version of Sage 100 Contractor is still version 19.4.58, but in the past few days Sage has advised that it will only support version 19.5 (which won’t be available until mid-December) for the impending Year End. The 19.5 update will contain the 2015 Tax Tables.  Thus, be on the lookout for the version 19.5 in December and be ready to install it so that withholdings for 2015 Federal and State Income Taxes will be correctly calculated.

Time to Start Preparing for Year End!

It may not yet be Thanksgiving, but it’s not too early to start preparing for W-2s and 1099s that must be filed in January 2015.

Vendor Payments and 1099s

Most construction businesses will be required to report payments for services totaling more than $600 per year to recipients that are not specifically exempted from such reporting.  Exempted recipients include corporations (other than professional services corporations like doctors and lawyers), governmental agencies, non-profits, banks, and insurance carriers.  Individuals, sole proprietorships, partnerships, and limited liability companies are not exempt from 1099 reporting. Payments for merchandise (but not parts installed as part of a service provided), certain expense reimbursements to employees, and loan principal repayments do not need to be reported on a 1099.

There are a number of steps that you can take to ease your 1099 processing before the end of the year.

• Request a form W-9 from all vendors paid this year to ensure that you have proper names, addresses and Taxpayer ID numbers for vendors. The form also will provide the information needed to determine if a vendor is an entity exempt from 1099 reporting.  The current W-9 form can be downloaded from http://www.irs.gov/pub/irs-pdf/fw9.pdf.
• Review all vendors to ensure that they reflect the correct 1099 Type and if they are designated to receive a 1099 with types 1-Misc, 2-Rent, 3-Sole Proprietor, or 4-Interest, make sure you have the correct Name, Address and Taxpayer ID#. If a vendor is type 5-No 1099, it can’t hurt to have a valid Taxpayer ID#, but you are generally not required to collect one.
• There is no excuse for having a vendor with a 1099 Type of 0-Undetermined unless you have never paid the vendor!
• Review report 4-1-1-61 Vendor 1099 report to find problems or missing data.
• If you have questions about what payments are included in the 1099 balances, run report 4-1-5-61 Vendor 1099 Payments to see the details.
• If your Sage 100 Contractor information is incomplete for the calendar year (for instance you implemented during the year, you may need to adjust your data for payments made outside of Sage 100 Contractor.  Contact your friendly Sage Certified Consultant for more information about this special situation.

I strongly recommend that users not order 1099 forms or plan on in-house printing and mailing of 1099s to recipients and government agencies.  This tends to be more expensive than using the embedded Aatrix E-File service. Yes, there is a cost per recipient, but when one factors in the cost of acquiring the forms and envelopes, printing the forms, stuffing envelopes, affixing postage, and mailing the forms, the benefits of using the Aatrix E-File service become obvious.

Payroll and W-2s

If you prepare your payroll in house and will have to distribute W-2s to the governments and your employees, there are a few steps you can do to ease the process before the end of the year.

• Review all 5-2-1 Employee records for accuracy of employee names, social security numbers and addresses. 
• Be aware of any employees that may have received third party sick pay from a workers compensation insurer or a disability insurance provider and ensure that all reported third party sick pay data has been properly recorded in your payroll records.
• Run 5-3-7 Payroll Audit regularly and ensure that all audit errors are corrected.
• Review with your outside tax accountant whether any items of additional compensation must be added to employees’ total compensation, such as the cost of “excess” employee life insurance, the value of personal use of company owned vehicles, certain benefits provided to company owners, etc.  Such additional compensation can be properly reflected in your payroll records, but care should be taken to quantify the amounts and record them properly.

I strongly recommend that users not order W-2 forms or plan on printing and mailing W-2s to employees and government agencies.  This tends to be more expensive than using the embedded Aatrix E-File service. Yes, there is a cost per employee, but when one factors in the cost of acquiring the forms and envelopes, printing the forms, stuffing envelopes, affixing postage, and mailing the forms, the benefits of using the Aatrix E-File service become obvious.