January 2021 is around the corner – are you prepared for year-end planning?

2 minute read time.

Out with the old, in with the new – January is almost here. Now is the time for year-end tax planning.  Most of us will look back at 2020 as a year of “new normals” with COVID-19.  With that in mind, you need to be even more focused on year-end and the tools available to help you get ready.

Year-End Planning Tools

Check out Sage.com/Resources and visit the Sage Year-end Center to find the following resources to help you with year-end processes and workflow: 

  • Helpful checklists: Print or review step-by-step tasks
  • Informal discussions: Share product tips and knowledge
  • Technical articles: Browse year-end-specific topics and guides
  • Product information: Review the latest news on product enhancements and tax updates
  • Training options: Register for courses specifically geared to help manage year-end tasks
  • Live chat: Get online assistance from knowledgeable analysts

Current 2021 Releases

Form 941 – Improved workflow

In June, the IRS released an updated Form 941 with fields that report amounts paid for Family and Sick leave under the Families First Coronavirus Response Act (FFCRA).  With release 2021.1, you can extract the amounts paid for Sick and Family leave allowed under the FFCRA and include them on the quarterly Form 941 filing.  An external wizard was developed and released in July that allowed you to extract this information for the 2nd quarter filing in July.  At that time, you had to manually add the calculated amounts to the Form 941.  With release  2021.1, this functionality is integrated directly into the Form 941 workflow.

Fields were also added to track the amount of deferred Social Security taxes.  Customers with no deferrals were able to use the previous form. We published Sage Knowledgebase article 107002 with details on how to properly configure the system to track these deferrals.

Sage 50 Tax Updates – Coming in December and January

Form 1099 NEC – New Reports

Form 1099-NEC is being reintroduced to report non-employee compensation. This new form replaces form 1099-MISC, Box 7, for reporting non-employee compensation only. Sage 50cloud Accounting is working with Aatrix to provide full functionality via updates and tax releases. 

Form W-2 – New Reporting Features

In July the IRS released Notice 2020-54 advising that the Sick Leave Wages/Qualified Family Leave Wages part of FFCRA paid to employees need to be reported in Box 14 on W-2, or separate statement.

W-2 reporting will also be impacted by the COVID-19 related option to defer Social Security tax in 2020.  Although the initial W-2 should reflect only the amounts withheld, users will need to file corrected W-2s and W-3s once the catch-up withholding is completed in Q1 of 2021.  Information on how to comply with this latest update will be forthcoming. 

Tax Rate Changes to NJ Payroll Tax Table

IMPORTANT NOTE: this update applies only to Sage 50 release 2021.1 and does not apply to prior releases of Sage 50.  

The New Jersey payroll tax formula that computes State Unemployment Tax and Family Leave Insurance (FLI) for the employee is incorrect, due to varying rates and wage base limit thresholds introduced in 2020 that deviate from norms utilized in prior years. The Limit Threshold is also incorrect for the Employer-paid portions for State Disability Tax.  Learn more in Sage Knowledgebase article 107789.   

REMINDER:  If you have not upgraded to Release 2021.0, here’s some of the key enhancements you get when you install the latest release – to get more information click here.

Need helpclosing the year?    

Visit Sage.com/Resourcesfor options, including links to Sage Year-end Center, Sage Knowledgebase, Sage City, and Sage University, as well as Sage Q&A Live, Chat, and Online Case submission.     

  • i need assistance with my first 2021 payroll.  my employee loans were entered on the 4  that i have, but when i run a sample check to make sure the loan balance is correct, the balance is wrong.  this happened last year and a sage representative had to remote in to fix.  same problem this year.  possibly same employees.