1099 Processing

Overview

The Accounts Payable System is designed to track 1099 information about account transactions, print 1099s of various types and produce a transmittal file which can be off loaded to tape and sent to the IRS.

Since you may be using printers which vary from other users, we suggest that you start early and test the 1099's well in advance of having to mail them to insure that if there are changes to be made there is sufficient time to do so before the mailing deadline. At least three to four weeks in advance is suggested. If you have enough 1099s to require tape transmittal, insure you run and submit a test tape to the IRS well in advance of the final submission deadline.

Each Account within the system can be assigned a default 1099 type and amount code. When transactions are placed in the system, they will default to the 1099 type and amount code associated with the account. See: Assigning Default 1099 Codes However, the user may override the type and/or amount code on any individual transaction or indicate that a particular transaction is not a 1099 transaction. See: Overriding Default 1099 Codes

As each transaction is paid, the payment amount is added to a 1099 for the account according to the codes associated with the transaction. This allows you to review 1099s for the year at any time.

There are several steps you may need to take at the end of the year to help get ready to produce your 1099s. Since all of the accounts may not have been properly identified and coded during the year, you may need to review the accounts and reset the 1099 codes on the related payable items. Reviewing Accounts for 1099 Processing.

You may also review all paid items associated with each 1099 to verify that all items are correctly coded to that 1099 and if not change the item coding. See Reviewing Paid Items for 1099 Processing

You may also need to review payments to any miscellaneous vendors to determine if any of those payments would require 1099s. See Converting Miscellaneous Vendors to Regular Vendors.

The last step is printing the 1099 forms and creating the transmittal file for the IRS, if needed. This step may be repeated as until you are satisfied with the results. See Generating_1099_Forms_and_Transmittal_File

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Accounts can be assigned default values for 1099 processing. Both the 1099 type and the 1099 Amount Code can be set up in the Account. The values from the account will be defaulted into each Payable Item as it is entered for the account. The user may override the Payable Item to other values if necessary.

You may change the account defaults by selecting option "11=Accounts" from the Accounts Payable System display. Position the list to the account you wish to change. Use option "2=Change" next the the account and press the "Enter" key. Using the "Page Down" key, go to the third page of the "Work with Account" display. The following display should be shown.

Assign the 1099 Federal Tax ID, the 1099 Type and 1099 Amount Code. If the account will have payments may which require multiple 1099 Types and/or amount codes, you may want to set the default the Type and Amount code which you feel will be encountered most often.

Placing the cursor on the 1099 Type field and pressing "F4" will display a list of 1099 Types. Only types for MISC, INT, and PATR are supported for printing and transmission at the current time. If others are needed, contact us about more 1099 types.

The 1099 Amount Code is the box in which the amount must be entered on the 1099 itself. You should see the latest IRS publications covering instructions for 1099 filing. We use Specifications for Filing Forms 1098, 1099 series, 5498, 5498-MSA and W-2G Magnetically or Electronically.

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When entering transactions it may be necessary to override either the 1099 Type and/or Amount Code. This occurs when multiple types of payments are made to the same vendor. This will require that the vendor receive one 1099 type with multiple amount boxes filled in or even multiple 1099 forms (one for each type of transaction).

To override the payable item with 1099 Type or amount codes, you must change the codes on the payable item itself. This may be done either at the time the payable item is entered or it may be changes at a later date. The change is made on the Work with Payable Item display. See below.

You may reach this display by using the "Change=2" option from any list of payable items whether paid or not.

Assign the 1099 Federal Tax ID, the 1099 Type and 1099 Amount Code.

Placing the cursor on the 1099 Type field and pressing "F4" will display a list of 1099 Types. Only types for MISC, INT, and PATR are supported for printing and transmission at the current time. If others are needed, contact us for more 1099 types.

The 1099 Amount Code is the box in which the amount must be entered on the 1099 itself. You should see the latest IRS publications covering instructions for 1099 filing. We use Specifications for Filing Forms 1098, 1099 series, 5498, 5498-MSA and W-2G Magnetically or Electronically.

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From the "Accounts Payable System" display, use option "11=Accounts" to work with accounts. If not on the "Work with 1099 Accounts" list, use the "F20=Alt View" function key until this list is displayed. (See below)

From this display you can review all accounts and determine if they are properly coded for 1099 processing. By using "2=Change" you can correct the status of each account as necessary. As you change each account you will asked if you would like to reset account item 1099s. If you confirm the reset, all items for the vendor for the period indicates will be reset to match the update vendor codes. (See below).

Caution: If the vendor requires multiple 1099 Types and/or amounts, you will have to review and adjust each payable item as needed to correct the coding.

Depending on the number of payable items associated with the account, you may not want to reset as you go. You can review all accounts after you complete the changes by using the "F10=Review All" option on the bottom of the account list display.

Caution: If any vendors require multiple 1099 Types and/or amounts, you will have to review and adjust each payable item as needed to correct the codes.

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You can review the items associated with each payment that are assigned to a 1099. Enter option "36=Gvt Forms" from either the "Work with Accounts" display or the "Accounts Payable System". You will see listed all of the 1099 reports for either the selected account or for the entire company depending on the display used. One of the two following displays will result:

By using option "33=Payee Items" on either of the above displays, you will see a list of payable items for the account and the related 1099 reporting of payments. (See below)

From this display you can change the payable item 1099 Type and Amount Codes as needed.

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Miscellaneous vendor payments are made to the same vendor account. This account contains a flag indicating it is a miscellaneous vendor. When payable items are entered to a miscellaneous vendor, you are prompted for the name and address to print on the check. These names and addresses can be selected and used for more than one payable item. All payable items for a miscellaneous vendor name and address are paid on a separate check with the associated name and address.

Although the miscellaneous vendor is designed for what are expected to be one time transactions, there are occasions where a miscellaneous vendor is used when a regular vendor should have been set up. This may occur because there are many payments made to the same vendor and you wish better tracking for that vendor or the vendor represented by the name and address requires a 1099 or maybe someone entered items for an existing regular vendor account to the miscellaneous vendor by mistake..

You can convert a miscellaneous vendor name and address to a regular vendor account. When this occurs, all invoices related to the name and address will be move to the regular vendor account.

A miscellaneous vendor name and address and its related transactions can be converted to a regular vendor by setting up the name and address in the name and address file, adding a vendor to the Accounts Payable System and then instructing the system to move the miscellaneous vendor name and address transactions to the new vendor. When this occurs, the miscellaneous vendor name and address is removed. If the vendor requires a 1099, the vendor should be reviewed after the items are moved to insure a 1099 Type record is created.

To move the items from the, go to one of the "Work with Accounts" displays by selecting option "11=Accounts" from the "Accounts Payable System" display. From here us the "F17=Misc Names" function key. The following display should be shown.

From this display you can review the amounts and number of payable items that have been paid to each of the miscellaneous names and addresses. When you determine that one of these should be converted to a regular vendor account, use option "42=Convert to an Account" to set up a vendor account move the associated items to the new vendor account. When you press "Enter", the following display will be shown.

Enter the new vendor account number. If you have not yet created a new vendor account or you wish to select and existing account, you can use the "F4=Prompt" key and either select the vendor account or add the new vendor account in the normal manner. Once the account number is entered press the enter key. You will receive a confirm prompt. If you are ready to move the items, enter a "Y". The items will be move and the name and address will be removed.

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The 1099 forms and transmission file may be generated as many times as you wish until you are satisfied with the results. The 1099 forms may be printed on stock computer paper instead of using the forms in order for you check and verify the results. Once you are satisfied, you can generate the final version and print on the actual 1099 forms.

You generate the 1099 forms by selecting Option "36=Gvt Rpts" from the Account Payable System Display and then using function "F18=Generate IRS Transmission". The following will display should appear.

From this display you can enter the date of the 1099 forms you want printed. The date will default to 12/31 of the year closest to the current date.

Enter the Payer Account Number. The Payer Account Number is used to identify your company, not the company that was paid. Your company name name and address must exist in the Name and Address file and you must add the account to the Accounts Payable System.

Enter the IRS Payer Control number. This number is required for magnetic filing.

Enter your TIN number.

The last filing indicator is used to tell the IRS that this is the last filing they should expect from you company. It should only be set to "1" if you company is going out of business or for some other reason your company will not be filing after this year.

The test indicator should be set to "T" if you are sending the IRS a magnetic tape for testing only.

Indicate whether you are going to print on a laser print or a tractor feed printer. The laser selection will print 3 forms per page and uses different spaceing than the tractor feed form. (Currently laser is only set up for 1099 Misc forms. Let us know if you require other 1099 forms on laser.. ) For the laser forms, the spool file is created with the Save value as *YES. This will allow you print the 1099's multiple times. Once for each copy of the form (ie Copy A, Copy B and Copy C.)

Enter the file name and library where you wish to have the file placed. Once the file has been created, it can saved from this library on tape and sent to the IRS. If you are not sure where to create this file, contact someone in you computer department for assistance.

When you have finished filling in this page, press the "Enter" key. You will be asked to confirm you action. If you are sure you are ready to execute the function, enter "Y" to confirm.

The system will now generate a spool file for each type of 1099 to be printed and will generate one transmittal file to be saved for the IRS.

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