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Welcome!to the
Year End Processing Guide Review for Online Credit
Unions
Presented by the Client Service & Education Team
Host: Ellie Barton Harding ~ Education Coordinator
Year End Processing Guide Review
Year End Processing Guide Review
For your convenience, our detailed 2014 Year End Processing guide is available on our website.
To access the guide: http://cunorthwest.com/end-of-year/
Reference tab End of Year
What’s New for 2014?
IRS has announced new HSA limits for 2015. If your statement print vendor is not The Masters Touch and you would like to
use substitute 1099-INT forms, call your vendor to verify whether they can process substitute 1099-INTs.
Private Mortgage Insurance (PMI) premiums are no longer reported and will not appear on the 1098 form. See Page 27 for more information.
Due to year-end dates, Beginning-of-Year/Tax File Verification reports should be reviewed on January 2 to ensure all deadlines are met. See Page 39.
When generating 1099-INT/substitute 1099-INT forms, we will now ignore the “Report dividends to IRS” flag on IRA and HSA products since those dividends are not reportable.
When closing the general ledger for year-end, you are no longer required to move the “Current processing year/month” back to Dec 2014 from Jan 2015 in order to post the year-end journal entry generated during Step 4. See page 43 for more information.
Page 4
Other Reminders Verify dividend rate changes
Important – Assign year-end tasks as soon as possible so deadlines on pages 6 and 7 of this booklet are met.
Don’t forget to enter Mortgage Insurance Premium data prior to year end!!
Deadlines refer to 8 p.m. EST on the deadline day.
Ascensus-administered IRA programs – Credit Union’s must notify Ascensus with instructions.
Page 4-5
Other Reminders cont’d No need to call!! CU*Base Alerts will be sent when
transmission of data is completed.
IRA/HSA balance file verification – Set aside time during the first week in January. Don’t wait until after year end! We recommend monthly or at least quarterly verifications.
In-house eDOC server – Please review the detailed instructions on page 5 for archival of your tax forms.
Page 5
2014 Task Checklist
Remember this checklist is for many teams in your organization! We recommend sharing this timeline with the everyone involved in any of these processes.
Page 6 -7
Tax Form Information Tax form quick reference section
Alternate Addresses – printed on tax forms/member names come from Master record
DBA Names – never printed on tax forms
Tax form pricing See pricing information in booklet.
Blank forms – www.irs.gov.
Archival forms on CD – pricing in booklet.
Page 8-9
When Using Member Statements as Substitute
1099-INTsDeadline!
Complete CU*Base Tax Instructions Screen – Deadline
passed 11/21/14
Statement Message Instructions – 12/5/2014
Page 10
Statement Message Instructions –When Using Member Statements as Substitute
1099-INTs
Printing Costs - detailed information regarding the printing of substitute 1099-INT information on member statements can be found on the bottom of page 10
Page 10
Statement Message Instructions –When Using Member Statements as
Substitute 1099-INTs
Points to remember Remember that IRS regulations prohibit the use of
any marketing-related messages on the statements.
Either clear all messages or insert generic text ONLY about the substitute 1099-INT. See page 13 for more details.
If using a Statement Printer other than The Masters Touch– verify they can process substitute 1099-INT forms.
Page 11
Envelope Requirements – When Using Member Statements as
Substitute 1099-INT’s Must be marked “Important Tax Information
Enclosed”.
The Masters Touch Clients – instruction insert and envelope notation will be handled for you. Pricing can be found on Page 9.
CU’s that use a different statement processor will need to contact the statement vendor directly.
Page 11
Statements – When Using Member Statements as Substitute
1099-INT’s 1099’s are generated by Account Number.
Members with two separate memberships using the same SSN will receive a separate 1099 for each membership.
Generated for “Active Accounts” and accounts that were closed accounts during the final statement period.
Will be printed for every member even those with $0.00.
Page 11
Information on the statement– When Using Member Statements as
Substitute 1099-INT’s
Substitute 1099’s - applies to substitute 1099–INTs only! (Not 1098 or any other 1099 information)
Information must all print on the same page of the statement If the entire form does not fit on the last page of the
statement, another page will be generated for that membership.
Page11
For Credit Unions Offering E-Statements – When Using Member
Statements as substitute 1099-INT’s
You will need to make sure that members understand: They will not receive any forms in the mail.
They must view their year-end statement through online banking in order to see the 1099-INT information. See page 14 for details.
Page 11-12
2014 Conversions
If your credit union “converted” to CU*Base during 2014, you may NOT use your year-end statements as substitute 1099-INTs.
Page 12
Need More Information?
Please refer to the IRS Publication 1179 “General Rules and Specifications For Substitute Forms 1096, 1098, 1099, 5498, W2-G and 1042-S.”
www.irs.gov
Page 12
Special Instructions for CU’s Offering E-Statements
Deadline!
Preliminary Alert Message – November or December
Modify e-statement notification message for December during
December
Page 14-15
Messages – For CU’s Offering E-Statements
If your Credit union offers E-Statements Suggested messages and detailed information
An Alert Message should also be added to your website.
Modify e-statement notification messages before month-end
Page 14-15
Information for recipient – taken from the back of a standard 1099-INT form
This sample PDF was taken from: http://irs.gov/pub/irs-pdf/f1099int.pdf
The Masters Touch uses this same text for the instructions that will be inserted with your statements
Page 16
End of Year Statement Audits
If your credit union uses The Masters Touch for your statements and has an Audit Run planned Special envelopes must be ordered
Contact the Masters Touch no later than 12/12/14
509-326-7475
Insert Due Date is earlier than normal – 12/27/14
Page 19
Setting 2015 Holidays Configure your credit union business days
Using the standard Federal Holidays
or
Update/Customize your business days
Updates are performed MNCNFD #23
Please do not change the processing days without contacting CU*Answers
Page 20
Verifying Loan Categories
Page 21
Deadline!
Before December 12th
Verifying Loan Categories Loan Category Configuration!
Mortgage and equity loan categories must have the “Send 1098 tax form” field checked
Before changing loan category configurations – contact the Client Service Team
Page 21-24
Verifying Loan Categories
1098 forms are not generated for less than $600.00 Your CU can choose to send a form for amounts under
$600.00 – [email protected]
Exception: Student Loan Categories Do not check the 1098 flag on these categories
Student Loan Categories have a Process Type of “P” which will cause a 1098-E to generate.
Page 21-24
Verifying Loan Categories - cont.
Run the Loan Category Configuration Report – MNCNFX #18
1098 Reporting for Rewritten loans Must report interest & points paid on mortgages totaling
greater than $600.00
To combine your YTD Interest Paid you need to update the loan(s) using MNUPDT #2
For Mortgage Points and More – see page 27
Page 22-24
Updating Tax File Data
Page 25
Deadline!
If using Substitute 1099-INTs – 12/31/14
If not – 01/06/15
Updating Tax File Data – cont.
Print a final copy of the 1099/1098 Tax Information Report after all changes are made - MNRPTF #1
If you make changes after your tax file deadlines - corrected paper forms must be generated by the credit union and sent to the member
Updates to the member’s tax file are performed using MNUPDT #18
Refer to page 53 to learn more about the tax file
Page 25-29
Updating Tax File Data - cont
Page 26 – Screen shots detailing the property tax paid field
Page 27 - Special Note – IRS Regulations for 2014 result in removing PMI premiums from the 1098 forms We have changed the 1098 vendor print file so vendors can
choose to print ‘Property Tax Paid’ – Included for Sage Direct forms.
If using other vendors, updated files have been sent, please contact those vendors for details on their plans.
Page 25-29
Verifying Share & Certificates Products – for 1099-INT Reporting
Page 30
Deadline!
12/12/2014
Verifying Share & Certificates Products - cont.
Printing reports for this process can be done on MNCNFX # 16 & 17 You will be verifying the flag ‘Report
Dividends to IRS’ Important! – If settings are incorrect, an
additional fee will be charged for additional runs of your forms!
For Credit Union memberships – update the Foreign Citizen Flag and Dividend Post Code
Page 30-32
Verifying A/P Vendors – for IRS Reporting
Page 33 - 34
Deadline!
Perform before 12/12/2014 – Verify the setting of the
‘Create a form 1099-MISC year end’ flag.
Between 1/1/2015 – 1/6/2015 – Verify the amount shown in the ‘Previous year 1099-
MISC amount’ field
Verifying A/P Vendors - cont.
Verify the Account Payable vendor records Verify the setting of the ‘Create a form
1099-MISC year end’ flag. Verify the amount shown in the ‘Previous
year 1099-MISC amount’
Page 33-35
Month-End Verifications
Perform your monthly verification of member data for share and certificate dividends, loan interest, fee postings and other misc. monthly verifications
Refer to the separate Month-End Processing Verification Booklet
Page 36
Deadline!
After End-of-Year Processing for 12/31/2014
Month-End Verifications - if your rates will change at Year-End
Making changes to your Savings or Checking rates? Plan to review any changes made the morning after they
are scheduled
Run the Share Dividend Configuration Report from MNCNFX #17
Rate changes occur during end-of-day processing
Page 36
Annual Statement Preparation
Page 37
Deadline!
12/5/14 – update your statement message!
12/27/14 – inserts delivered to The Masters Touch
Annual Statement Preparations – cont.
Remember that ALL member will receive a statement regardless of activity!
As a result, your total page count for statements will be higher at year-end
Page 37-38
Beginning of Year – Tax File Verification Reports
Important!
Review your Beginning of Year Tax File reports on January 2
Reports are generated on January 1 and archived in CU*SPY under ‘End of Month’ category
Page 39 - 40
Fair Market Value for IRA’s to Members & the IRS
If your credit union is Ascensus-Administered and has also made arrangements for Ascensus to provide duplicate Fair Market Value to your members, CU*Answers will send this file after January 6, 2015
If your CU is self-administered, the Fair Market Value will be reported on your Y/E members statements
Page 41
Updating the IRA and HSA Balance File Limits
If your member has an existing IRA or HSA at end of this year, CU*NorthWest will automatically create the 2014 balance file and set limits as published by the IRS
If you have members with special limits, you can maintain them anytime during January
New limits for HSA’s for 2014
Manual adjustments for special circumstances can be done after Year-end.
Page 42
General Ledger Year-End Closing Instructions
If your CU wishes to perform this process, steps are detailed on pages 43-48
If your CU would like CU*Answers to close your books for you, contact SRS Bookkeeping Services at ext. 277
Page 43 - 48
Verify the IRA/HSA Balance File
Page 49-53
Deadline!
1099 Distributions 1/6/2015
5498 Contributions 4/15 – 4/18
Verifying the IRA/HSA Balance File – cont.
Verification should already be taking place – Monthly or Quarterly
Verify using reports generated in MNRPTF #9
Update records: In MNUPDT #16 – ‘Update IRA/HSA Trans Post Codes’
Or #17 –’ Update IRA Balance Information’
And #19 ‘Update IRA Beneficiary Info’, > F15 Distributions.
Page 49-53
Verifying the IRA/HSA Balance File – cont.
Please review this section as some information will need manual input.
Run another report for your records after all updates
Special note to Credit Unions Converted During 2014
IRA Balance File is what is reported for members
Page 49-53
Verify the Tax file and printing the 1099/1098 Tax Info Report
Page 54 - 56
Deadline!
Prior to Printing1/6/2015
Prior to reporting 02/7/2015
The Tax file and printing the 1099/1098 Tax info Reports
Your credit union is responsible for reviewing the accuracy of the data that will be used to produce forms and report to the IRS.
Print the 1099/1098 Tax Info Reports from MNRPTF #1 & #2
Page 54-56
Ascensus Administered – 1099-R/1099-SA and 5498/5498-SA, ESA
Page 57 - 58
Deadline!
1099-R/1099-SA reported after 1/6/2015
5498/5498-SA final changes between 4/15 – 4/18
All 5498 reporting to IRS by 6/2/2015
Ascensus Administered – 1099-R/1099-SA -cont.
1099-R and 1099-SA Instructions are on page 57 If your CU’s IRA or HSA programs are administered by
Ascensus, you can choose to have CU*NorthWest report the 1099-R distribution data
1099-Q information for **(Coverdell Education IRA’s cannot be submitted to Ascensus via a file!)
Run the 1099/1098 Tax Information Report using MNRPTF #1
Page 57
Ascensus Administered – 5498/5498SA, ESA – cont.
5498/5498-SA page 58
Run the ‘IRA Govt./ Report / 5498 – MNRPTF #7’
Updates are performed MNUPDT #16 and #17
Final adjustments for IRA and HSA Balance Files must be done before 04/18/2015
Page 58
Self Administered 5498/5498 SA, ESA
Page 59
Deadline!
5498/5498-SA final changes between 4/15 – 4/18
All 5498 reporting to IRS by 6/2/2015
Self Administered 5498/5498-SA, ESA– cont.
Verify IRA contributions using MNRPTF #7
Updates are performed using MNUPDT # 16 and #17
Remember members have until April 15th. 2014 to make contributions for 2014!
Final adjustments to the IRA and HSA Balance file must be done before April 18th, 2015
Page 59
Questions?
http://cunorthwest.com/end-of-year/
2014 Year-End Processing Guide – for Online Credit Unions
Thank you for attending our Year-End Guide Review!Presented by: Client Service and Education Team
