prepare for end-of-year reporting & 1099s (webinar slides)

2016 © AppFolio, Inc. Confidential.


AppFolio End of Year Preparation

November 2016


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Hello!Jake SchlingmanTraining Manager

Q&A Panelists: Katie RudolphBreigh CavenderMorgan Fredricks

Today’s Presenter:


Time: Approximately 60 minutes

Webinar is being recorded

Follow-up Email: Link to recording and slides within 48 hours

Details


Agenda

● Understanding AppFolio’s EOY Process● Review and Update Information and

Settings● Generate Reports and Send 1099s● FAQs● Coming Soon!


End of Year Preparation Poll #1What have you done to prep for year end?

• Checked tax settings for owners, vendors & PM co.• Reviewed ownership dates & vendor 1099 payers• Run financial reports to verify owners’ 1099 totals• Gotten owner consent to only send 1099s electronically• Nothing yet


Understanding AppFolio’s

EOY Process


What Happens at Year-End?

• “Soft” journal entry to close books - Return income and expense account balances to zero ($0.00)

• Done after month chosen as the “Fiscal Year End” on property page

• On Balance Sheet - Calculated Retained Earnings (this year’s net income) moved into Calculated Prior Years Retained Earning


How AppFolio Calculates 1099’s• Based on Gross Income • 1099 total = Total Operating

Income + Prepaid RentoAdd prepaid rent GL to Cash Flow!

• Can mark GL accounts exempt from 1099 reporting if not taxable

• Can exclude owners by setting a minimum income amount


Manage Mid-Year Migrations For Owners:

o Make sure year-to-date income balances were brought forward in Implementation

o Can be added with a Journal Entry per property if they were notFor Vendors:

o If 1099 payer is the Management Company:

• Make sure 1099 Balance Forward is entered on vendor’s page

o If the vendor 1099 payer is the owner or portfolio:

• Vendor 1099s need to be done from both systems (prior and AppFolio)


Review and Update Information and

Settings


Verify Settings

• Property Management Company Tax Settings

• Owner & Vendor Tax Settings

• GL Accounts for 1099 Reporting

• Who Pays Vendor 1099

• Property Ownership Dates


Property Management Co. Tax Settings

• Phone Number

• Taxpayer Name

• Taxpayer ID• Transmitter Control Code (TCC)

- For FIRE file only

• Contact Name - For FIRE file only

Under Company Settings:


Vendor & Owner Tax Settings

Verify the following for Owners & Vendors: • Taxpayer Name• Taxpayer ID• Send 1099? - Yes or No


GL Accounts for 1099 Reporting• Confirm all non-taxable

income accounts marked as Exempt

• Setting on GL Account page • Use Chart of Accounts

report• Group by “Options”

column


Vendor 1099 Payer on Properties• Setting is on Property page in

“Owners and Financials” section

• Set as management company, owner or portfolio

• Default is management company

• If set to owner or portfolio, you may see multiple 1099s for some vendors


Verify Property Ownership Dates

• Cash balances are attached to the property, not the owner

• Use “New Ownership” feature to record an ownership change

• Can set a new ownership’s start date during or after the change process


Reports to Review Owner 1099 Information

Owner 1099 Summary:• Includes all hidden properties and owners with taxable income• Click 1099 total to open Cash Flow report filtered for the tax year

o 1099 total = Total Operating Income + Prepaid Rent

Owner 1099 Detail:• Shows owners’ 1099 totals per property• Shows ownership dates during the tax year• Click 1099 total to open General Ledger filtered for the tax year


Reports to Review Vendor 1099 Information

Vendor 1099 Summary:• Includes all hidden properties and vendors with taxable income• Click 1099 total to open Vendor 1099 Detail report filtered for the tax

year

Vendor 1099 Detail:

• Shows each payment contributing to a vendor’s 1099 total


Demo


Generate EOY Reports


Reports to Explain 1099 Totals

1.Cash Flow o Run for tax year, includes YTD totals

2.12 Month Cash Flow3.Cash Flow Comparison

o Useful for owners of multiple properties

4.Income Statement - 12 Month

Remember to add prepaid rent GL to Cash Flow!


Troubleshooting Reports

Suppressed Fees on Cash Flow Vendor Markup/Discounts on Cash Flow

Will show on cash flow if not zeroed out in the same month

Will show on Cash Flow by default

•Should be paid out in the same month as received to show a net change of $0.00

•Can be marked as exempt from 1099 reporting

•Only suppressed from the Owner Statement

•Can be marked as exempt from 1099 reporting


Use “Send Owner Packet” Function“Send Owner Packets” filters:

1. Date range = Tax year

2. Leave Owner and Properties blank

3. Select “Show All Properties”4. Select desired report, e.g

Cash Flow

5. Click Search6. Click “Preview” links in results

to print the PDF without sending.


Ownership Changes: Sending Owner Packets• The “Send Owner Packets” function will not reflect ownership

changes that happened throughout the year• Send reports individually to owners involved in an ownership

change during the tax year• Create a property group for all properties that did not undergo

an ownership change during the year to save time and paper!


FAQs


FAQsWhy doesn’t my 1099 match my Cash Flow/Income Statement?

• Make sure that you have selected “Show All Properties” on your Cash Flow versus “Show Active Properties”

• If you have changed ownership at the property, make sure you filter the Cash Flow report for that property for the appropriate date range

• Remember that some income accounts may be exempt from 1099 reporting, and you will need to add Prepaid Rent to all income not exempt to find the total amount on your 1099


FAQsWhy are there multiple 1099s for some of my vendors?

• In the “Owners and Financials” section of each property’s page, there is the option to specify the owner or management company as the “Vendor 1099 Payer”

• If each property lists the management company here, each vendor will receive one 1099

• However, if owners are listed as the vendor payer on some properties, the vendor will receive a 1099 for each of these owners as well


FAQsI began using AppFolio midway through the year. How can I edit the amount generated by the system?

• You cannot edit the amount on 1099s generated through AppFolio• Best practice is to send one 1099 from AppFolio and one from your

previous solution


FAQsDo I have to file by e-File and if so, how do I obtain a transmitter

control code?

• The IRS requires anyone submitting more than 250 forms to submit by e-File (FIRE file)

• The Transmitter Code (TCC) must be requested by the IRS at www.IRS.gov

• Approval can take up to six weeks so don’t wait• Will also need to setup account with the FIRE file system at

www.fire.irs.gov


FAQsWho do I contact about Accounting Questions?

• AppFolio is not able to provide accounting advice. Please contact an Accountant or CPA for legal questions regarding taxes and filing


Coming Soon!


Coming Soon!• Record Owner Consent in

AppFolio

• Set Owner’s preference

• Collect consent through Owner Portal


Recap● Understanding AppFolio’s EOY Process

● Review and Update Information and Settings

● Demo● Generate EOY Reports

● FAQs

● Coming Soon!


Tips for Success

Start Early Dedicate Time Report Early

Don’t wait until due dates to begin the

process!

Don’t try to manage EOY activities along with day to day responsibility

Send “draft” versions of reports to have

recipients review for any questions or concerns


1099 Help ResourcesHelp & Training > Access Help Center


End of Year Preparation Poll #2When will you start to prep for year end?

• Now!

• This month (November)

• December

• January

• Not sure


Action ChecklistAction ☑

Review Owner & Vendor 1099 Summary Reports for complete info ☐

Review property management co. tax settings ☐

Review financial reports for accurate 1099 totals ☐

Send draft Owner & Vendor reports (optional) ☐

Relax and Enjoy the Holidays! ☐


Thanks!Any questions?

Please submit a support request through the Help Center!

prepare for end-of-year reporting & 1099s (webinar slides)

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