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1099 Filing in the New Year

Bam Boom Cloud Productivity, Top Tips

New Year is just around the corner, and that means it is time to start preparing for your 1099 filing. Read on to find out the key points to consider when using Business Central for your 1099 filing, along with details of a helpful app to make reporting easier.

  1. If you haven’t already, update your Form Boxes via the 1099 Form Boxes page.
  2. Run Vendor 1099 Information to find out amounts that have been paid. If the report is empty, even though there should be amounts, go to Vendor Ledger Entries and fill in the IRS 1099 Code and IRS 1099 Amounts.  These fields are editable on posted entries.
  3. Check that your vendor Federal IDs are:
    1. Filled in
    2. Exactly 9 digits
    3. Not duplicated.

(Note: Business Central will print 1099s even if there is no Federal ID or if the Federal ID is not exactly 9 characters, but these will be rejected by the IRS.)

There is a 1099 Toolkit app available for purchase via Extension Marketplace that has an ability to review 1099 data quickly and easily, correct any missing or inaccurate information prior to submitting it to the IRS. It also provides a tool to create a file formatted according to IRS requirements to upload it through the FIRE (Filing Information Returns Electronically) portal.

  1. Remember that 1099 amounts are reportable to the IRS for the year the payment was made to the Vendor, regardless of the invoice date.
  2. Check that your 099-MISC, 1099-INT, 1099-DIV, 1099-NEC and 1096 Forms are up to date. Prior to printing onto the pre-printed forms, do a test-print.

(Note: Although the form alignment has been tested with various printers, minor alignment adjustments may be needed for some printers to ensure printing is within the confines of the 1099 document boxes. Please allow for adequate preparation time by testing the alignment of these documents.)

  1. If you are uploading data through the FIRE (Filing Information Returns Electronically) portal, there is no need to print a 1096 Summary document.
  2. Know your coding! 1099 coding is complicated. There are now 70 different types of payments to Vendors that are reported on 8 different 1099 forms:

BProceeds from Broker & Barter Exchange Transactions7 types of payments
DIVDividends and Distributions15 types of payments
INTInterest Income12 types of payments
MISCMiscellaneous Income14 types of payments
PATRPatronage Dividends11 types of Payments
NECNon-Employee Compensation2 types of payments
RPensions/Ann./Retirement/Profit-Shar.Plans/ IRAs.8 types of payments
SProceeds from Real Estate Transactions1 type of payment

Note that the IRS does not require you to send a 1099 to corporations, only to individuals.

Here at Bam Boom! Cloud we understand that 1099 filing can sometimes be complicated. If you have any issues or questions, our support team is here to help.

Check out Spark for more tips like this one.