How do I create 1099s?

If the entity has paid more than $600 to someone for services, a 1099 may need to be issued to them.

Form 1099-MISC

  • BIAS fills in the required information on two-per-page pre-printed 1099 forms.  These forms can be acquired at any major office supply store.  See Quills.com Item # 901-6103E25 as an example of the 1099 package needed.   Caution, be careful ordering from the IRS, they may still send out carbon copy versions not intended for modern laser printers!
  • BIAS does not currently support electronic 1099 reporting through the FIRE system.
  • Send vendors IRS Form W-9 to gather required information for reporting, including SS# or EIN.

Who Gets a 1099 - IRS Criteria

Any qualifying vendor paid $600 or more during the year for any of the following items.  Qualifying vendors include individuals, partnerships, and LLC's.  It does NOT include corporations or government agencies.  There are two exceptions to the business type rule:  attorneys and medical providers always get a 1099.

  • Box 1:  Rent paid to a property owner (not reportable if paid to a real estate agent)
  • Box 6:  Payments to medical providers for healthcare services.  This includes paying for flu shots or physicals for your employees or medical insurance premiums.  The only medical providers exempt from 1099 reporting are tax-exempt or federally owned hospitals or extended care facilities.
  • Box 7:  Services provided by any non-employee; This always includes payments to attorneys regardless of business type.  If payments for services is lumped together with parts and materials, report the total paid.

There are more reportable payments that are extremely unlikely for a typical local government (like fish purchases in cash).  For detailed requirements of all reporting boxes on form 1099-MISC, see the IRS Instructions for Form 1099-MISC.

Deadlines

 

  • 1099-Copy A and form 1096 are due to the IRS by January 31st.  Mail 1099-Copy A and form 1096 to:

BIAS 1099 Setup

Identify Qualifying Vendors

Go To Transactions > Vendor Accounts

  1. Highlight desired Vendor
  2. Click View

  1. Review complete Address and Contact Info, including SS/EIN#
  2. Check Requires 1099
  3. If a completed W-9 is on file, check W9 On File
  4. To override the $600 minimum, check Mandatory

1099 Chart of Account Setup

Go To Transactions > Chart Of Accounts > Line View

Identify Reportable Expenses

  1. Expense codes with OB, object range, of 40-49 and 60-64 usually represent payment for services, medical care, and rent.
  2. Use the 1099 column to assign MISC, for 1099-MISC, and the Box column to assign 1 for rent, 6 for medical care, or 7 for services.

Once an expense code is assigned, any expenses paid to a qualifying vendor with that expense code will be included for 1099 reporting.

Review Vendor Totals

Go to Reports > Annual Reports > Print Vendor Totals

  1. Select Tax Year
  2. Choose Expenditures and Claims this will exclude revenue and payroll entries
  3. Click Generate to populate the vendor totals
  4. Filter Required 1099 and W9 On File to view vendors with required 1099 and W9.

Review the list for vendors over $600 that are not corporations or other governments.  Investigate any vendors that are not obviously corporate and not already flagged for a 1099.

If the 1099 column is not visible, use the Columns button in the Chart Of Accounts to turn it on.

Produce and Print Form 1099-MISC

Go To Reports > 1099 Information

  1. Select the Tax Year
  2. Select Type MISC
  3. Click Generate 1099s , review the 1099s that populate.  If there are missing 1099s that need to be added, go back and check the vendor setup or the expense code setup.
  4. To review the expenses contributing to the 1099 total for each vendor, click X-Ref Report and click Preview.

Print Forms 1099-MISC and Form 1096

  1. Confirm entity information is filled in correctly for ID, Name, Address, etc.  Contact information is the 1099 preparer
  2. Select  Form 1099  
  3. Load 1099 Copy-B (for vendor) into the printer. Click Printer to start the printing.
  4. Load 1099 Copy-C (for your records) into the printer, click Printer to print
  5. Load red 1099 Copy-A (for IRS) into the printer,click Printer to print
  6. Select Form 1096.
  7. Load Form 1096 into the printer, click Printer to print.
Congratulations, you are done!

0 Comments

Add your comment

E-Mail me when someone replies to this comment