Please note we are not authorized to give you tax advice. We recommend you talk with a tax professional to ensure you meet the tax reporting obligations appropriate for your business.
Important IRS Deadlines
By 1st February 2022 – Send 1099-MISC and 1099-NEC statements to Recipients.
By 1st February 2022 – E-file form 1099-NEC statements to IRS.
By 15th March 2022 – Send form 1042-S statements to Recipients.
By 15th March 2022 – E-file form 1042-S statements to IRS.
By 31st March 2022 – E-file form 1099-MISC statements to IRS.
* If the deadline is missed, you still have an obligation to provide the tax statement as soon as possible.
End of Year Tax (EOY) Review and Filling
Here is a quick step-by-step guide of the key tasks that we will help you complete with the Trolley's Tax Center as part of your year-end reporting for the IRS:
Provide your company’s Business Tax Profile info for the tax year
Review Recipient Earnings
Deliver EOY Tax Statements to Recipients (1099-NEC, 1099-MISC, 1042-S)
E-File to the IRS (1099-NEC, 1099-MISC, 1042-S)
All of your year-end tax reporting can be found in your Trolley account in the Tax Center, which is accessible via the Tax Center tab on the main left menu.
Your End of Year tax reporting for each tax year can be found at the top of the Tax Center main page. Select the 2021 Tax Year, and then the blue button ‘Navigate to the EOY Review & Filing Tab’ to get started.
Note: Each previous year’s end-of-year tax data can be accessed on the split drop-down button. We “lock” prior year's tax data so it is no longer edible at the end of the following year – to safeguard against accidentally updating prior-year tax information.
EOY Tax Review & Filling
Our year-end tax product has been laid out with horizontal tabs to organize the work you do into logical sections. In addition, you will see the main due dates on each tab, to remind you when certain tasks should be completed. In this guide, we will explain each step. We have also provided additional guide notes within the Tax Center to assist you.
The below Tabs are your main navigation through the EOY tax reporting process. Additional indicators will appear on each tab to show you helpful information quickly, such as the status of a tab (ex. completed or incomplete). If some form types don’t apply to your business, such as if you do not need to send any 1042-S statement to non-US recipients, then you won't see those tabs in your Dashboard.
1. Add Offline Payments
Make sure all your payment data has been added
One of the first things to do at this step is to ensure that you have all the reportable earnings data in the Trolley system for the tax year. If you sent any tax reportable payments outside of Trolley then you’ll want to import or add those payments as Offline Payments data.
Navigate to Payments > Offline Payments to get started.
Upload Offline Payments
Offline Payments are those that are not processed on the Trolley platform. If you processed payments to recipients during the tax year through a different payment provider (such as your bank, checks, or another payment platform), then you can include those payments in your EOY Statements in Trolley using the Offline Payments Upload.
(Please note that in some limited circumstances PayPal may generate a Form 1099-K statement for PayPal account holders and report payments for some recipients directly to the IRS, such as if the PayPal account holder is a US Person AND received more than $20,000 USD AND more than 200 PayPal payments within a tax year)
We have provided a sample and template file you can download and use. Just click on the “Upload Offline Payments” button, then you will have a link to “Download Offline Payment CSV Template” to find the template and sample file.
You can also add offline payment data manually, one at a time, via the “Payments” tab on a Recipient’s Profile, below the Payments table.
Once updated, select the ‘Add Offline Payment’ button at the bottom of the form.
Important information about Offline Payments:
The ‘Taxable’ (i.e. Tax Reportable) box must be selected/checked for the earnings to be reported on the end-of-year statement. If they are not marked as Taxable, then they will not be included in EOY tax reporting.
You can enter Earnings and Withholding amounts in any currency. We will automatically convert the amount to USD at the mid-market exchange rate (as provided by Open Exchange Rates) as of the ‘Processed On’ date that you provided.
Payout Reason is used to determine the income code taxable payments will be reported under.
The Memo and External ID fields can be used for your own reference.
You can provide the Payout Method (example: Bank Transfer, PayPal, etc). This is mainly useful if you use our Widget or Portal and have enabled Display Offline Payments in the Recent Payments history for the recipient to see those payments. This is an optional setting under Settings > White Label > Widget & Portal > Display Offline Payment History. If you have this setting enabled, recipients will be able to see this Offline Payment data. Disable this setting if you don’t wish to display Offline Payment data to recipients.
We have an API endpoint to automate the process of sending us Offline Payment data throughout the year, e.g. when the payment is sent outside of Trolley, you can automatically pass that offline payment data to us via API.
2. Business Tax Profile
Before you do anything, please provide your company’s tax info on the Business Tax Profile page. This info will be added to the 1099-MISC, 1099-NEC and 1042-S forms, as well as the E-Files. This includes the company's legal name, registered business address, EIN, TCC codes, Chapter 3 and Chapter 4 codes, etc.
Note: TCC codes are required if you plan on using Trolley to generate the E-Files for the IRS FIRE system.
You will be asked to provide up-to-date Business tax info each tax year. If you have used Trolley's EOY tax reporting software for the previous tax year, you will be able to save some time and copy all this info from the previous year by clicking on the ‘Copy over last year’s business tax profile?’ link at the top of the form.
Please then review the data to ensure it is still correct, and update as necessary.
Note: TCC codes can expire (example: if you did not use them to file in the past 2 tax years), and may have been re-issued, so please ensure you have your current TCC codes entered.
Once updated, please select the ‘Save Changes’ button at the bottom of the form.
3. Review and Approve Recipient Earnings
Now is one of the most important steps, checking that all the earnings and withholding for each recipient are accurate, and ‘approving’ each recipient’s earnings. By approving earnings, the EOY Tax Statement will be ready to generate and send to your recipients. You can also mark earnings as “Do Not Send”, or “Hold Earning Approval”
Approve = which means you have approved the earnings and withholdings are accurate.
Hold = You wish to put this one on hold (to the side) to come back to later. It is not a final status.
Do Not Send = you may choose to not send some forms, such as if they earned less than $10/$600, or you will handle that form manually yourself as it’s a special case. Forms with this status will not be sent/delivered, and not included on the E-filing exports. It is a final status
Custom Table Columns
On the Review Recipient Earnings page, you will be able to view all your recipients that were paid any tax reportable payments in the tax year. You can customize the columns shown on the table by clicking on the custom column icon on the top right of the table:
Export Data to CSV
You can also export the selected table data with the “Export” button if you wish to work on it in excel. Only the filtered displayed data will be exported, so remove any filters if you would like to export all data.
Note: Full TINs will not be exported for data security reasons, only masked TINs.
We have provided filters to allow you to filter recipients so you can review in a logical order that works for you. Just press the “Filter” button to see all filter options.
We have defaulted some filters to help you with what is required.
To remove the default settings click on the 'x' next to Filters.
The highlighted below are the defaults.
Search - by recipient name, email, ID.
Status (of the recipient's EOY Tax Statement: Needs Review, Approved, Hold, Do Not Send, Sent, Voided).
Tax Form type (W-9, W-8BEN, W-8BEN-E, etc)
Tax Statement (1099-MISC, 1099-NEC, 1042-S, No Form).
Earnings Less Than (e.g. if you would like to view all recipients that earned less than 10.00 or 600.00 USD in the tax year. Enter a number to represent a dollar amount).
Earnings Equal or Greater Than (you can enter a dollar amount, e.g. if you would like to view all recipients that earned more than 10.00 or 600.00 USD in the tax year).
Delivery Method (the recipient's selected tax statement delivery method, either E-delivery or Postal Mail).
US Federal Tax Classification (for US persons that completed a W-9, you can filter by Individual, S-Corp, C-Corp, LLC, Trust, etc).
Requires Statement Delivery (see ‘All’ recipients, or ‘Yes’ to see only those that do require a tax statement according to the following criteria, or ‘No’ to see those that do not require a tax statement according to the following criteria. The criteria are:
-Using the Independent Personal Services threshold (More than USD 600 paid in the tax year) for Independent Personal Services income type;
-Using the Royalties payments threshold (More than USD 10 paid in the tax year) for royalties income type;
-Excluding C-Corporations, S-Corporations, and LLC’s that elect treatment as an S-Corporation or C-Corporation, as these do not need to be sent a 1099 statement;
-Includes ALL recipients that have ANY withholding (even just $0.01). This includes corporations that meet the previous criteria.
Voided automated void for 1099/1042 forms.
4. Check W-9, W-8 Series and other tax forms are collected and reviewed
Ensure all recipients paid in the previous tax year (1st January to 31st December) that earned more than USD $600 for Independent Personal Services or more than USD $10 for Royalties, have completed a valid (i.e. in ‘Reviewed’ status) tax form (W-9, W-8BEN, W-8BEN-E, etc). Review and approve any un-reviewed forms (i.e. those in ‘Submitted’ status). If forms submitted are incorrect, you should ‘Void’ the form and request the user to submit a new tax form with corrected information.
When a tax form (W9 or W8) is in “Reviewed” status, the first circle in the “Progress” column will be a green checkmark.
This page displays earnings for all of your Trolley recipients. By default, we filter the list of recipients to show only the recipients that need a 1099-MISC or 1042-S, using the filter flag ‘Requires Statement Delivery’. We determine this by looking at these conditions:
Using the Royalties payments threshold (More than USD$10 paid in the tax year) for royalties income type;
Using the Independent Personal Services threshold (More than USD$600 paid in the tax year) for Independent Personal Services income type;
Excluding C-Corporations, S-Corporations, and LLC’s that elect treatment as an S-Corporation or C-Corporation, as these do not need to be sent a 1099-MISC;
Includes ALL recipients that have ANY withholding (even just $0.01). This includes corporations that meet the previous criteria.
On the home page of the Tax Centre – you can also review some warnings for the W-9 and W-8 forms submitted. These can be found on the red warning icon on the right of the table. Common warnings will include:
The Address information provided on the form looks invalid.
The recipient’s country does not match the country provided on the form.
The Foreign TIN provided on the form looks invalid.
These warnings are to help you identify potential issues with tax forms so you can look further into those forms to ensure they are valid.
Data Capture of uploaded tax forms
If a recipient’s tax form was Uploaded (e.g. a PDF or JPEG), then you may need to data capture some key details from their uploaded form to the system to ensure that you can generate their end-of-year tax statement and E-filing records. You can do this by ‘Editing’ the recipient’s uploaded tax form on their recipient profile or in the Tax Center.
The edit/manual data capture form looks similar to this below:
You will be asked to provide the date of signature of the form (when it was actually signed by the recipient), this is also used to notify you/the recipient when it expires, as W-8 forms expire after 3 years.
Resolve any TIN Matching flags
Trolley will perform TIN Matching with the IRS to check the provided US TINs (SSNs/EINs) and the individual or business’s name is accurate with the IRS records. If they do not match, we will display the TIN as “Not Valid”. You should VOID the Tax Form they completed (W-9, W-8) and ask the recipient to complete a new tax form to correct their TIN (or name). Usually, the TIN number or the name is not accurate.
For Foreign TINs for W-8 Forms, we perform validation checks for countries that have published rules for TIN formatting in their country. This covers approximately 85 countries, and includes business or individual entities, the TIN length (minimum and a maximum number of characters), and if it is alphanumeric, numeric-only or alpha only. If the Foreign TIN does not meet the published validation rules, we will provide a warning to you that it looks like it may be invalid. You can then review and Void the tax form (W-8) if you believe it to be incorrect.
5. Process End of Year Statements
After all the earnings are approved in the Review Earnings tab, it’s now time to deliver them to the recipients and then E-File with the IRS. There is a tab dedicated to each type of statement – 1099-MISC, 1099-NEC, and 1042-S.
a. E-Deliver Statements to Recipients
For all recipients (including those that selected Mail delivery), once this step is completed they will all be able to access their statement via the Recipient Widget or Portal (whichever you are using). They will receive a notice next time they are on the widget or portal letting them know it is available, and it will be accessible to download as a PDF. It will remain available to download until at least the 15th of October the following year, as per IRS rules. We will send an email notice (optional) branded as your business, letting them know their tax statement is available to be downloaded via the Widget/Portal. If you prefer to send your own email communications, you can do that and elect not to send the email via Trolley.
b. Mail Statements to Recipients
For recipients that have chosen to receive their statement by Mail (the IRS requires mail delivery to be an available option), you can send these with Trolley. We will print and send them within 24-48 hours from our fulfilment partner’s high-tech, secure mailing facility located in the US. Please note there is an additional cost for statements sent by mail.
c. E-Filing to the IRS
You can now download your E-FILE file and submit it to the IRS using the FIRE System (Filing Information Returns Electronically system). Trolley will generate your E-File file in the required IRS format, so you just need to upload it to the IRS with your FIRE System account and submit it. For files submitted on the FIRE System, it is the responsibility of the filer to check the status of the files within 5 business days to verify the results of the transmission. The IRS will not mail error reports for files that have errors. There is a separate file generated for both 1099-MISC and 1042-S, with different deadlines.
You will be able to track which E-Files were generated on the Trolley platform, and also any amendment files that have been generated. Please read the on-screen instructions carefully, depending on the type of Statement (1099 vs 1042), there may be a specific order you need to upload the files in on the IRS FIRE system.
If you don’t already have an IRS FIRE System account, you can set one up for free with the IRS. More details to do that can be found on the IRS website here: https://www.irs.gov/e-file-providers/filing-information-returns-electronically-fire -
Please note that it can take up to 45 days to set up your FIRE system account, so we suggest doing it ASAP.
If you prefer to use a third-party E-filing provider, you can. We can also provide the export in a more standard CSV file format that could be used with a third-party E-filing provider.
If you produce less than 250 - 1099s and 1042-S forms, in a tax year, the IRS allows you to print and mail the forms to the IRS. However, it is recommended to use the FIRE system for filers who have less than 250 information returns to file electronically as well.
What if I don’t have an IRS FIRE System account registered for E-filing? – We recommend that you register your company for an IRS FIRE System account if you don’t already have one registered. This can sometimes take up to 45 days to set up, so we suggest doing it ASAP. If you need some extra time to set up an e-services account, it may be possible to request an extension from the IRS. Please contact the IRS for more information on this. In some cases, your business may use a tax accountancy firm that has access to FIRE or the ability to do E-filing on your behalf. You may wish to speak to your tax accounting firm to clarify this.
How do I register with the IRS for a FIRE System account for E-filing? – If you have not yet registered for E-filing with the IRS, you will need to submit Form 4419 - Application for Filing Information Returns Electronically (FIRE), to request authorization to file Forms 1099 Series and 1042-S electronically through the Filing Information Returns Electronically (FIRE) System. It can take up to 45-days for your Form 4419 to be reviewed and may require additional documentation at the request of the IRS. If your application is approved, a Transmitter Control Code (TCC) will be assigned to your business and sent by U.S. Postal Service to the mailing address on Form 4419.
Do we have to use the Trolley's Tax Center if we used Trolley to collect our W-9/W-8 tax forms? – No, you don’t have to - but we hope you will. We have built our end-of-tax-year reporting processes to be very user-friendly and integrated into your Trolley account. We are offering very simple and low pricing, and we believe the time savings, efficiency and additional compliance will more than pay for itself. If you don’t agree, please contact us and let us know how we could make this work for you.
Can I download a copy of the end-of-year tax data? – Yes, this option is available once the tax statements have been delivered to recipients. The export file is in CSV format but is not formatted to any specific standard. You can download this under the E-File to IRS step.
Can I download a bulk copy of all the generated 1099/1042-S statements? – Yes, this option is available once the tax statements have been delivered to recipients. The forms are in PDF format. You can download this under the E-File to IRS step.
Can I still apply for TCC codes or is it too late? – Yes you still can, the IRS can take up to 45 days to issue those codes. You will need to request an extension for your 1099 filling due date by mailing in the extension form
How long is the EOY Tax Center open? – It will be open till June 2022 but to avoid penalties we recommend you file as soon as possible.
EOY Tax Center Pricing
Below you can find the transparent pricing for our end-of-year Tax Center services. We believe that the competitive price for this service offers an excellent value to you, our clients. By centralizing your end-of-year filings in our integrated Tax Center, you can streamline and standardize your tax workflow, saving time and effort spent manually preparing tax submissions.
1099-MISC, 1099-NEC and 1042-S generation and E-Delivery.
End of Year 1099-MISC and 1042-S tax statement generation in PDF includes TIN Matching and E-Delivery to the recipient.
$2.00 per tax statement
(for 1 to 1,000 per tax year)
$1.00 per tax statement
(1,001+ per tax year)
Mailing Tax Statements
Postal Mailing of a physical 1099-MISC, 1099-NEC or 1042-S Tax Statement to a recipient within 24-48 hours. Includes printing and postage costs to US addresses. (International postage is extra, see below).
$2.00 per mailed tax statement
(for 1 to 1,000 per tax year)
$1.00 per mailed tax statement
(for 1,001+ per tax year)
For mailing a statement to an address outside of the US, an extra USD $1.50 per statement to cover international postage costs.
$1.50 per internationally
mailed tax statement