2006 CHANGES TO TAX FORMS

							  2006
 CHANGES
    TO
TAX FORMS
What’s Changed
 for 2006???

  • Form W-2
 • Form W-2c
 • Form 4852
  • Form 941
  • Form 944
  • Form 940
      2006 Form W-2 Changes
• Box e — New Suffix Field

• Box 12 — New Codes AA and BB

• Back of Copy 2 — Employee Instructions

• Data Entry Reminder — Decimal Point
  and Cents are Required
          Form W-2c Changes
• Revised — January 2006

• Box c — SSN Corrections — ADDED

• Box e — Suffix Field — ADDED

• Magnetic Media Filing — ELIMINATED

• Online Filing — Available on SSA Website
        Form W-3c Changes
• Revised — January 2006

• Box c — Deleted ―Section 218‖ Checkbox

• Box c — Added ―944/944-SS‖ Checkbox
       Form 4852 Changes
• Revised in December 2005.
• Used for Missing or Incorrect
  Form W-2 or Form 1099-R.
• Added Checkboxes for Form ID.
• W-2 Filers Should Review Next
  Year’s Social Security Statement.
          Form 941 Changes
• Title Change—―QUARTERLY‖
• Lines 7f & 7g—―(attach Form 941c)‖
• Line 12—Credit Card Payments
• Caution—BOTH Pages Must Be
  Completed.
• Line 16—Added ―or Stopped Paying
  Wages.‖
• Alternative Signature [R. P. 2005-39]
               NEW Form 944
•   ANNUAL Employment Tax Return
•   Scannable
•   Small Employers [< = $1,000 in TOTAL Tax]
•   Notified by IRS
•   EXCEPTIONS [Call 1-800-829-0115]
    – E-file
    – Expected Liability EXCEEDS $1,000
• Deposit Rules Apply
• Credit Card Payments
           Changes to Form 940
            ―Plain & Simple‖
•   Completely Redesigned for 2006
•   Plain Language
•   Form 940, Part II — DELETED
•   Exempt Payments — Checkboxes
•   Schedule A — MultiState/Credit Reduction
•   New Payment Voucher
•   Form 940-EZ Discontinued
The new Form 940 for 2006 –
      ―Plain & Simple‖
    The new Form 940 for 2006 –
                ―Plain & Simple‖

• New check boxes in
  top right corner
  – No more A, B, C,
    questions
  – Will promote accuracy,
    reduce unnecessary
    correspondence
   The new Form 940 for 2006 –
            ―Plain & Simple‖
• No more hand-written explanations
  of exempt payments required
  – Check boxes capture exempt payments
   The new Form 940 for 2006 –
              ―Plain & Simple‖
• New section for computing adjustments
  – Replaced old Part II, lines 1-6 with new Part
    3 (lines 9, 10 & 11)
     The new Form 940 for 2006 –
                 ―Plain & Simple‖
• New Schedule A
  – Part 1 for multi-state employers
     • Simplifies the process - Just check the boxes to
       tell us where you were required to pay state
       unemployment tax.
  – Part 2 for credit reduction information
     • Will simplify computation, increase processing
       accuracy, and reduce unnecessary taxpayer
       correspondence.
The new Form 940 for 2006 –
Schedule A - ―Plain & Simple‖
  The new Form 940 for 2006 –
             ―Plain & Simple‖
• Form 940-V Payment Voucher removed
  from form
  – Less likelihood of being detached
  – Will expedite processing, prevent
    unnecessary correspondence
                Next Steps
• Completed design phase
• On track for 2006 release of new Form
• Working with software developers to
  ensure consistent format
• Processing of new Form 940 begins in
  January, 2007
2006 Changes to Forms 1098/1099
• Form 1098-C
 – 4 Boxes Added
 – Increased to Full Page
• Form 1098-T [R.P. 2005-50]
 – Change Accounting method (Paid vs. Billed)
• Form 1099-R
 – Codes ―V‖ & ―W‖ Added (Roth Distributions)
• NO NEW FORMS for 2006
• Magnetic Media [Pub. 1220]
 – 2006—No Diskette
 – 2008—No Tape
PROPOSED
 Changes
    to
   Tax
  Forms
           2007 Form W-2
• PROBLEM — Employee’s SSN is Visible
            in Window Envelopes
• PROPOSAL — Move SSN to Box a.
             Relocate Box a.

• New Problems???

• COMMENTS — Send Comments to:
               *taxforms@irs.gov.
      [Subject Line = ―Forms Comment‖]
              94X PROJECT
•   Office of Taxpayer Burden Reduction
•   2008 Target
•   CURRENT — Adjustments [941c]
•   PROPOSED — Amendment [941X]
•   COMMENTS — Send Comments to:
                    *taxforms@irs.gov.
     [Subject Line = ―Forms Comment‖]
QUESTIONS
   ???
    Send comments to:
 Gerald.P.Fournier@irs.gov