It’s Never too Soon to Prepare for Year-End Tax Reporting

August 24, 2020 Shareworks Marketing

If your company’s year-end brings feelings of anxiety and trepidation, you’re not alone. For most businesses, tax reporting requirements make it difficult to enjoy the end of the fiscal year. That said, from our experience, a little bit of planning can go a long way in reducing those negative feelings – and actually allow you to approach year-end without that heavy feeling of dread.

When it comes to year-end tax reporting, it’s helpful to understand your requirements well ahead of time and review a tax preparation checklist long before any payments are due. To better understand what this type of checklist should look like, it’s helpful to know what hurdles you might expect come tax time – and which pre-emptive measures can help you overcome them.

Year-end tax reporting: Simplifying the tax form process

Whether you need to produce a Form 3921, Form 1099 or report an employee’s taxable income on a Form W-2, there are steps you can take to streamline the process. For example, you can:

  • Coordinate with payroll or finance team ahead of time to ensure accuracy and create transparency with your employees.
  • Create a standardized process around tax forms that you and your team can leverage these year after year.
  • Take advantage of the features associated with your equity administration system. For instance, the Shareworks participant experience displays any taxes owed at the time of the transaction and the system allows you to generate and disseminate year-end Forms 3921 to employees as well as create the file that will be uploaded on the IRS FIRE site.

Additional tax reporting tips

  • If filing electronically for the first time, obtain a Transmitter Control Code (TCC) from the IRS. To get a TCC number assigned to your business, you’ll need to complete Form 4419, Application for Filing Information Returns Electronically (FIRE). This form can be downloaded or completed online on the IRS website:
  • Create an IRS FIRE account here: In Shareworks, at year-end you will be able to create the file in the proper format per the requirements and record layouts for easy upload to the IRS FIRE system.
  • Home address and TIN are required fields on Form 3921, so make sure this demographic information is populated in the Shareworks participant experience account for each employee who exercised an incentive stock option (ISO) during the year.
  • If you’ve completed a 409A Valuation in the past year, review exercises and releases completed after the effective date of the new valuation to ensure the Fair Market Value (FMV) on the date of exercise/release matches the correct value.

If you’d like access to additional tax reporting resources and information, register for an account with the Shareworks Academy.


NOTE: Shareworks provides a substitute statement for Form 3921, which meets the requirements of IRS Publication 1179.

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Shareworks by Morgan Stanley services are provided by Morgan Stanley Smith Barney LLC, member SIPC, and its affiliates, all wholly owned subsidiaries of Morgan Stanley.

Morgan Stanley and its Financial Advisors and Private Wealth Advisors do not provide any tax/legal advice. Consult your own tax/legal advisor before making any tax or legal-related investment decisions.

CRC 3154793 (07/2020)