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Purpose: This guide helps administrators configure and oversee tax reporting and compliance workflows.

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Overview

The Tax Reporting module manages the complete lifecycle of federal tax forms (1099-NEC, W-2, Form 941, Form 940) and state-level tax reporting. As an admin, you control tax year creation, form generation workflows, and delivery tracking.

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Key Responsibilities

  • Create and manage tax years
  • Configure tax module settings
  • Oversee form generation and filing
  • Monitor document distribution
  • Ensure IRS Pub 1075 compliance

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Who Should Use This Guide

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Permissions Required

To administer Tax Reporting, you need:
Note: Contact your Organization Administrator if you don’t have these permissions.

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Getting Started

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Accessing Tax Reporting

  1. Navigate to Finance & Revenue in the main menu
  2. Click Tax Compliance
  3. You’ll see the Tax Compliance Dashboard

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Understanding the Dashboard

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Tax Year Management

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Creating a Tax Year

  1. On the Dashboard, click Tax Years
  2. Click + New Tax Year
  3. Enter the tax year (e.g., 2025)
  4. Select start date and end date
  5. Click Create
Status Flow:
  • Active: Year is open; you can generate forms
  • In Review: Forms are being reviewed by accountants
  • Closed: Year is locked (irreversible); no further changes allowed

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Closing a Tax Year

  1. Navigate to the tax year detail page
  2. Click Close Tax Year
  3. Confirm the action:
    • All forms must be marked Ready to File
    • All distributions must be Sent
  4. Click Close
Closing a tax period cannot be undone.
What happens after closing:
  • Tax year becomes read-only
  • Historical forms remain accessible for audit
  • Archival data is preserved in pf_audit_logs

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Form Generation Workflows

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1099-NEC Generation (Vendors)

When to use: End of fiscal year, to report payments to vendors ≥ $600. Steps:
  1. Navigate to 1099 Forms
  2. Select the tax year
  3. Click Generate 1099 Forms
  4. System retrieves all vendor payments from Accounts Payable (FA-03)
  5. Review generated forms:
    • Vendor name and EIN
    • Gross payments (sum of all payments for the year)
    • Form type (1099-NEC default)
  6. Click Review Completed when all forms are verified
  7. Forms move to Ready to File status
Tips:
  • Ensure vendor EINs are complete before generation
  • Review thresholds ($600 minimum) with your accountant
  • Amended forms can be regenerated for the same vendor

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W-2 Generation (Employees)

When to use: End of calendar year, synchronized with HR Payroll. Steps:
  1. Navigate to W-2 Forms
  2. Select the tax year
  3. Click Generate W-2 Forms
  4. System fetches employee wage and tax data from HR Payroll (HR-07):
    • Wages, tips, and compensation
    • Federal tax withheld
    • Other deductions (401k, health insurance, etc.)
  5. Review forms:
    • Verify employee names and SSNs (encrypted; only visible to tax admins)
    • Confirm year-to-date totals
  6. Click Review Completed
  7. Forms move to Ready to File status
Tips:
  • Ensure payroll is finalized before W-2 generation
  • Coordinate with HR on any retroactive adjustments
  • W-2s are typically filed by January 31st

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Tax Reports (941 / 940)

When to use: 941 (quarterly payroll tax) and 940 (annual unemployment tax). Steps:
  1. Navigate to Tax Reports
  2. Select the tax year
  3. Click Generate Tax Reports
  4. Choose report type:
    • 941: Quarterly (Q1–Q4)
    • 940: Annual
  5. System aggregates payroll tax data and calculates liabilities
  6. Review:
    • Filing period
    • Calculated tax liability
    • Quarterly breakdown (for 941)
  7. Click Mark for Filing
  8. Forms move to Filed status (with filed_date)
Tips:
  • 941 deadlines: Q1 (Apr 30), Q2 (Jul 31), Q3 (Oct 31), Q4 (Jan 31 next year)
  • 940 deadline: January 31st (annual only)
  • Use the filing_date field to track submissions to IRS

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Tax Document Distribution

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Sending Tax Forms

1. Via Email
  1. Navigate to Distributions
  2. Select the forms to distribute (1099, W-2, etc.)
  3. Click Send to Recipients
  4. Review recipient list:
    • Vendor emails for 1099-NEC
    • Employee personal emails for W-2
  5. Click Send
  6. Status updates to Sent; timestamp recorded
2. Tracking Delivery
  1. View the Distributions page to monitor:
    • Sent: Emails dispatched successfully
    • Read: Recipient opened the email
    • Failed: Delivery errors (invalid email, bounce)
    • Resend: Resend to recipients with failed deliveries

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Module Settings

Access Settings from the Tax Compliance Dashboard to configure:

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Compliance & Security

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IRS Pub 1075 (Federal Tax Information)

  • SSN/EIN Storage: All sensitive tax identifiers are encrypted at rest
  • Access Control: Only users with fa.tax.admin can view decrypted SSN/EIN
  • Audit Trail: All form generation and distribution logged in pf_audit_logs
  • Retention: Tax documents retained for 7 years minimum (IRS requirement)

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Best Practices

✅ Do’s:
  • Verify all vendor EINs and employee SSNs before form generation
  • Review generated forms with your CPA or tax accountant
  • Test email deliveries in sandbox mode before going live
  • Archive signed tax forms per IRS retention policy
  • Monitor Failed distributions and resend proactively
❌ Don’ts:
  • Don’t close a tax year unless all forms are filed and distributed
  • Don’t modify SSN/EIN directly in forms (regenerate from payroll)
  • Don’t delete tax years (soft-delete only; use archival workflows)
  • Don’t share unencrypted SSN/EIN data via email or reports

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Troubleshooting

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Issue: Form Generation Fails

Symptoms: “Generation failed” error when clicking Generate 1099/W-2 Causes:
  • Missing payroll data for the tax year
  • Vendor/employee records incomplete (missing EIN/SSN)
  • Tax year not in Active status
Solution:
  1. Verify tax year is Active
  2. Check HR Payroll or Accounts Payable for missing data
  3. Complete vendor/employee records
  4. Retry generation

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Issue: Email Distribution Fails

Symptoms: Distributions show Failed status; recipients don’t receive forms Causes:
  • Invalid email address
  • Email server blacklist
  • Recipient email opted out
Solution:
  1. Verify email addresses in Contacts or Payroll
  2. Use Resend to retry failed deliveries
  3. Contact your email provider if repeated failures occur

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Issue: Tax Year Cannot Be Closed

Symptoms: “Cannot close tax year” error Causes:
  • Not all forms marked Ready to File
  • Outstanding distributions
Solution:
  1. Navigate to 1099 Forms and W-2 Forms
  2. Verify all are marked Ready to File
  3. Check Distributions for any Pending status
  4. Complete remaining tasks, then retry closing
  • User Guide: docs/fa/tax-reporting-user-guide.md - For staff generating and reviewing forms
  • Specification: specs/fa/specs/FA-10-tax-reporting-compliance.md - Technical architecture
  • Integration Guide: docs/architecture/integrations/FA-10-tax-reporting-INTEGRATION.md - Cross-core data flows
Last Updated: 2026-02-13
Questions? Contact your Organization Administrator or Finance Manager.