Welcome!
to the
Year End Processing Guide
Review for Online Credit Unions
Presented by the Client Service & Education Team
Host: Ellie Barton Harding ~ Education Coordinator
Year End Processing Guide Review
Year End Processing Guide Review

For your convenience, our detailed
2014 Year End Processing guide is
available on our website.

To access the guide:
http://cunorthwest.com/end-ofyear/

Reference tab

End of Year
What’s New for 2014?

IRS has announced new HSA limits for 2015.

If your statement print vendor is not The Masters Touch and you would like to use
substitute 1099-INT forms, call your vendor to verify whether they can process substitute
1099-INTs.

Private Mortgage Insurance (PMI) premiums are no longer reported and will not appear
on the 1098 form. See Page 27 for more information.

Due to year-end dates, Beginning-of-Year/Tax File Verification reports should be reviewed
on January 2 to ensure all deadlines are met. See Page 39.

When generating 1099-INT/substitute 1099-INT forms, we will now ignore the “Report
dividends to IRS” flag on IRA and HSA products since those dividends are not reportable.

When closing the general ledger for year-end, you are no longer required to move the
“Current processing year/month” back to Dec 2014 from Jan 2015 in order to post the
year-end journal entry generated during Step 4. See page 43 for more information.
Page 4
Other Reminders

Verify dividend rate changes

Important – Assign year-end tasks as soon as possible so
deadlines on pages 6 and 7 of this booklet are met.

Don’t forget to enter Mortgage Insurance Premium data prior
to year end!!

Deadlines refer to 8 p.m. EST on the deadline day.

Ascensus-administered IRA programs – Credit Union’s must
notify Ascensus with instructions.
Page 4-5
Other Reminders cont’d

No need to call!! CU*Base Alerts will be sent when transmission
of data is completed.

IRA/HSA balance file verification – Set aside time during the
first week in January. Don’t wait until after year end!


We recommend monthly or at least quarterly verifications.
In-house eDOC server – Please review the detailed instructions
on page 5 for archival of your tax forms.
Page 5
2014 Task Checklist

Remember this checklist is for many teams in your
organization! We recommend sharing this timeline with the
everyone involved in any of these processes.
Page 6 -7
Tax Form Information


Tax form quick reference section

Alternate Addresses – printed on tax forms/member names come
from Master record

DBA Names – never printed on tax forms
Tax form pricing

See pricing information in booklet.

Blank forms – www.irs.gov.

Archival forms on CD – pricing in booklet.
Page 8-9
When Using Member Statements
as Substitute 1099-INTs
Deadline!
Complete CU*Base Tax Instructions
Screen – Deadline passed 11/21/14
Statement Message Instructions –
12/5/2014
Page 10
Statement Message Instructions
–When Using Member Statements as Substitute
1099-INTs

Printing Costs - detailed information regarding the
printing of substitute 1099-INT information on member
statements can be found on the bottom of page 10
Page 10
Statement Message
Instructions –When Using Member
Statements as Substitute 1099-INTs
Points to remember

Remember that IRS regulations prohibit the use of any
marketing-related messages on the statements.

Either clear all messages or insert generic text ONLY
about the substitute 1099-INT. See page 13 for more
details.

If using a Statement Printer other than The Masters
Touch– verify they can process substitute 1099-INT forms.
Page 11
Envelope Requirements –
When Using Member Statements as
Substitute 1099-INT’s

Must be marked “Important Tax Information
Enclosed”.

The Masters Touch Clients – instruction insert and
envelope notation will be handled for you. Pricing
can be found on Page 9.

CU’s that use a different statement processor will
need to contact the statement vendor directly.
Page 11
Statements – When Using Member
Statements as Substitute 1099-INT’s

1099’s are generated by Account Number.

Members with two separate memberships using
the same SSN will receive a separate 1099 for
each membership.

Generated for “Active Accounts” and accounts
that were closed accounts during the final
statement period.

Will be printed for every member even those with
$0.00.
Page 11
Information on the statement–
When Using Member Statements as Substitute
1099-INT’s

Substitute 1099’s - applies to substitute 1099–INTs
only! (Not 1098 or any other 1099 information)

Information must all print on the same page of the
statement

If the entire form does not fit on the last page of the
statement, another page will be generated for that
membership.
Page11
For Credit Unions Offering
E-Statements – When Using Member
Statements as substitute 1099-INT’s

You will need to make sure that members
understand:

They will not receive any forms in the mail.

They must view their year-end statement through
online banking in order to see the 1099-INT
information. See page 14 for details.
Page 11-12
2014 Conversions
If your credit union “converted” to CU*Base during 2014,
you may NOT use your year-end statements as substitute
1099-INTs.
Page 12
Need More Information?
Please refer to the IRS Publication 1179 “General Rules
and Specifications For Substitute Forms 1096, 1098, 1099,
5498, W2-G and 1042-S.”
www.irs.gov
Page 12
Special Instructions for CU’s
Offering E-Statements
Deadline!
Preliminary Alert Message –
November or December
Modify e-statement notification
message for December during
December
Page 14-15
Messages –
For CU’s Offering E-Statements

If your Credit union offers E-Statements

Suggested messages and detailed information

An Alert Message should also be added to your website.

Modify e-statement notification messages before month-end
Page 14-15
Information for recipient –
taken from the back of a
standard 1099-INT form

This sample PDF was taken from: http://irs.gov/pub/irspdf/f1099int.pdf

The Masters Touch uses this same text for the instructions
that will be inserted with your statements
Page 16
End of Year Statement
Audits

If your credit union uses The Masters Touch for your
statements and has an Audit Run planned

Special envelopes must be ordered

Contact the Masters Touch no later than 12/12/14

509-326-7475

Insert Due Date is earlier than normal – 12/27/14
Page 19
Setting 2015 Holidays

Configure your credit union business days

Using the standard Federal Holidays
or

Update/Customize your business days

Updates are performed MNCNFD #23
Please do not change the processing days without
contacting CU*Answers
Page 20
Verifying Loan Categories
Deadline!
Before December 12th
Page 21
Verifying Loan Categories

Loan Category Configuration!

Mortgage and equity loan categories must have the
“Send 1098 tax form” field checked

Before changing loan category configurations –
contact the Client Service Team
Page 21-24
Verifying Loan Categories

1098 forms are not generated for less than $600.00


Your CU can choose to send a form for amounts under
$600.00 – operations@cuanswers.com
Exception: Student Loan Categories

Do not check the 1098 flag on these categories

Student Loan Categories have a Process Type of “P”
which will cause a 1098-E to generate.
Page 21-24
Verifying Loan Categories cont.

Run the Loan Category Configuration Report – MNCNFX
#18

1098 Reporting for Rewritten loans


Must report interest & points paid on mortgages totaling
greater than $600.00

To combine your YTD Interest Paid you need to update the
loan(s) using MNUPDT #2
For Mortgage Points and More – see page 27
Page 22-24
Updating Tax File Data
Deadline!
If using Substitute 1099-INTs –
12/31/14
If not – 01/06/15
Page 25
Updating Tax File Data –
cont.

Print a final copy of the 1099/1098 Tax Information
Report after all changes are made - MNRPTF #1

If you make changes after your tax file deadlines corrected paper forms must be generated by the credit
union and sent to the member

Updates to the member’s tax file are performed using
MNUPDT #18

Refer to page 53 to learn more about the tax file
Page 25-29
Updating Tax File Data cont

Page 26 – Screen shots detailing the property tax paid field

Page 27 - Special Note – IRS Regulations for 2014 result in
removing PMI premiums from the 1098 forms

We have changed the 1098 vendor print file so vendors can
choose to print ‘Property Tax Paid’ – Included for Sage Direct
forms.

If using other vendors, updated files have been sent, please
contact those vendors for details on their plans.
Page 25-29
Verifying Share &
Certificates Products – for
1099-INT Reporting
Deadline!
12/12/2014
Page 30
Verifying Share & Certificates
Products - cont.

Printing reports for this process can be done on
MNCNFX # 16 & 17
 You
will be verifying the flag ‘Report
Dividends to IRS’

Important! – If settings are incorrect, an
additional fee will be charged for additional
runs of your forms!

For Credit Union memberships – update the
Foreign Citizen Flag and Dividend Post Code
Page 30-32
Verifying A/P Vendors –
for IRS Reporting
Deadline!
Perform before 12/12/2014 –
Verify the setting of the ‘Create
a form 1099-MISC year end’
flag.
Between 1/1/2015 – 1/6/2015 –
Verify the amount shown in the
Pageyear
33 - 34
‘Previous
1099-MISC
amount’ field
Verifying A/P Vendors - cont.

Verify the Account Payable vendor
records
 Verify
the setting of the ‘Create a form 1099MISC year end’ flag.
 Verify
the amount shown in the ‘Previous
year 1099-MISC amount’
Page 33-35
Month-End Verifications
Deadline!
After End-of-Year Processing for
12/31/2014

Perform your monthly verification of member data
for share and certificate dividends, loan interest,
fee postings and other misc. monthly verifications

Refer to the separate Month-End Processing
Verification Booklet
Page 36
Month-End Verifications - if your
rates will change at Year-End


Making changes to your Savings or Checking rates?

Plan to review any changes made the morning after they
are scheduled

Run the Share Dividend Configuration Report from
MNCNFX #17
Rate changes occur during end-of-day processing
Page 36
Annual Statement
Preparation
Deadline!
12/5/14 – update your
statement message!
12/27/14 – inserts delivered to
The Masters Touch
Page 37
Annual Statement Preparations
– cont.

Remember that ALL member will
receive a statement regardless of
activity!

As a result, your total page count for
statements will be higher at year-end
Page 37-38
Beginning of Year –
Tax File Verification Reports
Important!

Review your Beginning of Year Tax File reports on
January 2

Reports are generated on January 1 and archived in
CU*SPY under ‘End of Month’ category
Page 39 - 40
Fair Market Value for IRA’s
to Members & the IRS

If your credit union is Ascensus-Administered and has also
made arrangements for Ascensus to provide duplicate Fair
Market Value to your members, CU*Answers will send this file
after January 6, 2015

If your CU is self-administered, the Fair Market Value will be
reported on your Y/E members statements
Page 41
Updating the IRA and HSA
Balance File Limits

If your member has an existing IRA or HSA at end of this
year, CU*NorthWest will automatically create the 2014
balance file and set limits as published by the IRS

If you have members with special limits, you can
maintain them anytime during January

New limits for HSA’s for 2014

Manual adjustments for special circumstances can be
done after Year-end.
Page 42
General Ledger Year-End
Closing Instructions

If your CU wishes to perform this process, steps are detailed
on pages 43-48

If your CU would like CU*Answers to close your books for
you, contact SRS Bookkeeping Services at ext. 277
Page 43 - 48
Verify the IRA/HSA Balance
File
Deadline!
1099 Distributions 1/6/2015
5498 Contributions 4/15 – 4/18
Page 49-53
Verifying the IRA/HSA Balance
File – cont.

Verification should already be taking place – Monthly or
Quarterly

Verify using reports generated in MNRPTF #9

Update records:

In MNUPDT #16 – ‘Update IRA/HSA Trans Post Codes’

Or #17 –’ Update IRA Balance Information’

And #19 ‘Update IRA Beneficiary Info’, > F15 Distributions.
Page 49-53
Verifying the IRA/HSA Balance
File – cont.

Please review this section as some information will need
manual input.

Run another report for your records after all updates

Special note to Credit Unions Converted During 2014

IRA Balance File is what is reported for members
Page 49-53
Verify the Tax file and
printing the 1099/1098 Tax
Info Report
Deadline!
Prior to Printing1/6/2015
Prior to reporting 02/7/2015
Page 54 - 56
The Tax file and printing the
1099/1098 Tax info Reports

Your credit union is responsible for reviewing the accuracy of
the data that will be used to produce forms and report to
the IRS.

Print the 1099/1098 Tax Info Reports from MNRPTF #1 & #2
Page 54-56
Ascensus Administered –
1099-R/1099-SA and 5498/5498-SA, ESA
Deadline!
1099-R/1099-SA reported after
1/6/2015
5498/5498-SA final changes
between 4/15 – 4/18
All 5498 reporting to IRS by
6/2/2015
Page 57 - 58
Ascensus Administered –
1099-R/1099-SA -cont.

1099-R and 1099-SA Instructions are on page 57

If your CU’s IRA or HSA programs are administered by Ascensus,
you can choose to have CU*NorthWest report the 1099-R
distribution data

1099-Q information for **(Coverdell Education IRA’s cannot
be submitted to Ascensus via a file!)

Run the 1099/1098 Tax Information Report using MNRPTF #1
Page 57
Ascensus Administered –
5498/5498SA, ESA – cont.

5498/5498-SA page 58

Run the ‘IRA Govt./ Report / 5498 – MNRPTF #7’

Updates are performed MNUPDT #16 and #17

Final adjustments for IRA and HSA Balance Files must be
done before 04/18/2015
Page 58
Self Administered
5498/5498 SA, ESA
Deadline!
5498/5498-SA final changes
between 4/15 – 4/18
All 5498 reporting to IRS by
6/2/2015
Page 59
Self Administered 5498/5498SA, ESA– cont.

Verify IRA contributions using MNRPTF #7

Updates are performed using MNUPDT # 16 and #17

Remember members have until April 15th. 2014 to make
contributions for 2014!

Final adjustments to the IRA and HSA Balance file must be
done before April 18th, 2015
Page 59
Questions?
2014 Year-End Processing Guide – for
Online Credit Unions
http://cunorthwest.com/end-of-year/
Thank you for attending our
Year-End Guide Review!
Presented by: Client Service and
Education Team