Tax Reporting & Compliance — Admin Guide

Documentation Index

Fetch the complete documentation index at: https://docs.encoreos.io/llms.txt

Use this file to discover all available pages before exploring further.

Version: 1.0.0
Module: FA (Finance & Revenue)
Status: Active

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

---

​

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.

​

Key Responsibilities

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

​

Who Should Use This Guide

---

​

Permissions Required

To administer Tax Reporting, you need:

Note: Contact your Organization Administrator if you don’t have these permissions.

---

​

Getting Started

​

Accessing Tax Reporting

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

​

Understanding the Dashboard

---

​

Tax Year Management

​

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

​

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 (this action 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

---

​

Form Generation Workflows

​

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

---

​

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

---

​

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

---

​

Tax Document Distribution

​

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

---

​

Module Settings

Access Settings from the Tax Compliance Dashboard to configure:

---

​

Compliance & Security

​

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)

​

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

---

​

Troubleshooting

​

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

---

​

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

---

​

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

---

​

Related Documentation

• 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.