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 –
• New Schedule A

“Plain & Simple”

– 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