ACCLIVITY BLOG

If you receive funds via a credit card, debit card or online payment providers (e.g. PayPal), you’ll most likely be receiving a 1099-K form this year.

The IRS is looking to collect from those who may not have reported all appropriate payments, especially those through PayPal. Merchant account providers and sites like PayPal will be sending the new Form 1099-K to their merchants.

How does this affect 1099-MISC forms and AccountEdge?

The IRS decided (a bit late) that the 1099-MISC form that is typically sent to some vendors should not include credit card, debit card, PayPal, etc. payments. If included, the party on the receiving end would likely be hit twice for the same payment.

At the end of next week, we’ll release an update to AccountEdge Pro 2012 that will help you to exclude these types of payments a bit easier. The Print 1099 function will be also updated so that it will automatically exclude payments from certain accounts; for example: a credit card liability account. You will be able to select which accounts to exclude payments from.

You’ll also be able to drill into each 1099 vendor, view payments and decide which, if any, to exclude. This is where it gets a little complicated. In AccountEdge, we can’t tell if a payment was made with PayPal or even a debit card. So you’ll need to drill into a vendor if you make payments to them via Debit, Credit or Paypal so that you can exclude those payments.

We’ve also made a few other changes to help make this process a bit easier, so be on the lookout for an update coming to AccountEdge Pro 2012 at the end of next week.

You can find a video covering the new 1099 Assistant here.

Does this affect my Schedule C?

Although the IRS is requiring the new 1099-K and changes to the 1099-MISC for 2011 tax year, they’ve decided not to require you to split out income by payment type on the new Schedule C.

Starting in tax year 2012 (not this coming April) you will likely be asked to split out your income based on payment method. (see box 1a on the 2011 Schedule C) The 1099-K would let you know the amount from those payment sources for box 1a. In the instructions for the 2011 Schedule C, you will notice that you are not asked to split out the 1099-K payments this year.

If you’re using a previous version of AccountEdge and plan on sending out some 1099’s, you may want to consider upgrading to AccountEdge Pro 2012 in order to obtain this updated Print 1099 functionality.

-Tom

If you do the bookkeeping or accounting in your company, you’re probably getting ready for the end of your payroll year (and beginning of the new year). This post covers a good approach to the end of the payroll year in AccountEdge and specifically which steps you should take, and in what order to make the beginning of the year and W-2s go smoothly.

For example, with AccountEdge, you can only print W-2s for 2011 while your 2011 Payroll Year is open, BUT you can’t run a payroll in 2012 until you start a new payroll year. So, you could run your W-2s first thing in January, but a better approach would be to make a backup of 2011, start your new year, then use that backup to run W-2s at the end of January.

There’s also the question of when to load the 2012 payroll tax tables. (hint: after you Start a New Payroll Year)

So here’s my recommended approach for the ending and starting your payroll year.

Run Your Last Payroll
Straightforward enough. Process your last set of pay checks for 2011.

Make a Backup of 2011 (VERY IMPORTANT)
With this approach to your year end, you should make a backup after your last payroll. Give it a name that includes “2011”, so you know that this is the final backup for 2011, and that includes your last payroll. This backup will be used later in January to run your W-2s and 1099s. You should consider going to the Setup menu, choosing Preferences/Security, then choosing “Mark Company File as Read-Only” to prevent you from entering data into your backup of last year once you start a new year.

Start a New Payroll Year
Use the assistant found under the File menu to start your new payroll year. Once you do this, you’re officially done with the 2011 payroll year and won’t be able to run paychecks. You also won’t be able to run W-2s for 2011, which is why you made a backup in the prior step.

Install Updates and Load Tax Tables
You can install the update itself immediately after your last payroll, but it’s important not to load your new 2012 payroll tax tables until you are in your 2012 payroll year. Because the Social Security maximum changed for 2012, these tables have an effect on W-2s and 941s.

Run Your First Payroll for 2012
You’re ready for your first payroll of the year. Be on the lookout for new payroll updates though. Many states tend to approve their changes too late in the year for us to include in the first payroll update, and many end up approving them after the new year, and even into February.

W-2 and 1099s
When you’re ready to run your W-2s and 1099s for the year, restore that very important 2011 backup you made earlier. This backup is important because it contains your final payroll and 1099 numbers used on these forms. Once restored, run the “Prepare Payroll Tax Forms” assistant, found in the Payroll command center (top right corner) or “Print 1099s” option, accessible from the payroll or purchases command center.

Close Your Backup
Once you’re done with W-2s and 1099s, don’t forget that you’re in your old 2011 backup and enter transactions by accident. Close your backup file, and open your current company file before you begin entering transactions for 2012.

That should do it. If you have questions or need some help, please check out the Help system for End of Period Procedures or check out the Discussion Forums, Knowledge Base, or contact us via the Support Center.

We’ve made some changes to upgrading and where we store files with AccountEdge Pro 2012. The videos below cover some of the basics as well as what’s new about upgrading that will help the process go smoothly. Topics include:

-Company files, forms and other files are stored in a new location
-Upgrading now starts from the Welcome Window
-How to upgrade/move your forms, graphics, custom reports, etc
-Be sure to check for updates after installing
-New Mac system requirements
-How to register and where you’re serial number can be found

How to Upgrade Video Playlist

The January 2012 Product and Payroll updates are available for the following products listed below.

These updates should be installed only after running your final 2011 payroll.

The U.S. 2012 updates include 2012 payroll tax changes, product enhancements and address several defects. These updates is recommended for all v2012 customers.

Canadian releases include 2012 payroll tax changes and support for creation of Electronic T4 XML files which can be used to submit to the CRA.

US
-AccountEdge Pro 2012 Mac and Windows r16.1.1
-AccountEdge Network Edition 2012 for Mac r16.1.1

-AccountEdge 2011 Mac and Windows r15.0.10
-AccountEdge Network Edition 2012 Mac r15.0.10

Canada
-AccountEdge 2011 r15.3.3 for Mac and Windows
-AccountEdge Network Edition 2011 Mac r15.3.3

Use the Check for Updates function in your software (Help menu on Windows or AccountEdge menu on Mac) to learn more and install these updates.