Tax forms are an easy sell

By Elise Hacking Carr

The More  You Know

When it comes to selling anything, there is no magic formula. However, learning the basics always is a good starting point. In the tax forms business, distributors should be aware of the differences between W-2s and 1099s.

Both forms have their own set of unique standards, according to Paul Willard, sales manager for Grand Rapids, Michigan-based Broker Forms. He explained that a company’s payroll department uses W-2s to report earnings and taxes for employees. Meanwhile, the accounts payable department traditionally uses 1099s to report payments made to subcontractors or other business transactions.

Distributors can use Broker Forms’ “Guide to Successful Selling” as an additional tool to help customers choose the appropriate form. Here, Willard provided some of the questions and answers that can be found in the guide to ordering.

W-2 Ordering

• How many employees do you have? This determines how many forms you need to order.

• Which state(s) are you reporting to? This determines how many parts you need and which forms you should order. If reporting to a state, order a six-part form.

• Do you need to file a copy with a city or local tax agency? If yes, order an eight-part form.

• Are you filing for one company (EIN) or multiple? You need one W-3 transmittal form for each EIN.

• What software are you using? Be sure the forms you choose are compatible, or data won’t align in boxes correctly.

• Do you need blank or preprinted forms? If your software prints only the data, use preprinted forms. If it prints the form image and data, use blank perforated laser paper.

1099 Ordering

• Which forms do you need? There are a couple dozen different 1099s used for various types of reporting. We have a chart of forms and what they are used to report as a reference in our catalog, and will soon be added to the website.

• What software are you using? Standard 1099 formats are compatible with most software programs. Non-standard formats, such as 4up 1099-MISC, are supported by some software, but not all. Be sure you have compatible forms, or data won’t align in the boxes correctly.

• Do you need blank or preprinted forms? If your software prints only the data, use preprinted forms. If it prints the form image and data, use blank perforated laser paper.

• How many forms do you need? Order one for each recipient.

• How many parts do you need? If you need to file 1099-R or 1099-MISC with a city and/or state (if they collect income tax), order a four- or five-part form.

• How many 1096 forms do you need? Use one 1096 transmittal for each type of 1099 form filed by each payer.

It's time to set the record straight about tax forms. They're not a hard sell, which is good news for distributors.

"[This] is a myth other distributors would like to keep you believing," said Jim Magdaleno, product manager for Oxnard, California-based TFP Data Systems.

Paul Willard, sales manager for Grand Rapids, Michigan-based Broker Forms, agreed, adding, "A misconception is that they are hard to sell because they're complicated and you need to understand compliance issues to sell effectively."