New Tax Forms and eFiling for 1099’s - Sage Accounting ... · New Tax Forms and eFiling for...

New Tax Forms and eFiling for 1099’s

Description Get the info on all of our tax forms, eFiling, and year-end process improvements that will make your 1099 process in 2008 the best ever!

Learning Objectives At the end of today’s session, you will be able to:

• Verify vendor information

• Prove reportable 1099 payments are correct

• Produce 1099’s accurately in print or electronic format

• Setup Security Rights for 1099’s

© 2008 Sage Software, Inc. All rights reserved. Sage Software, Sage Software logos, and the Sage Software product and service names mentioned herein are registered trademarks or trademarks of Sage Software, Inc., or its affiliated entities. All other trademarks or registered trademarks are the property of their respective owners.


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Preparing 1099’s Hands on Lab

Organization Information Prior to creating 1099s, you need to verify the accuracy of your organization information.

If you are planning to use Electronic filing to file W-2, 941, 1099, and/or Payroll State Unemployment Tax information for your organization, complete the Electronic Filing tab. You can access this tab through the Administration module’s Organization > Organization Information menu item.

TIP: See your IRS or Social Security Administration Instructions for more information about Electronic Filing.

Contact Information – Enter the appropriate information for the organization.

Preferred Method of Notification – Enter the contact method preferred (required) – P (Postal Service) or E (E-mail).

Name – Enter the person to be contacted concerning processing questions.

E-mail – Enter the contact's e-mail address if "E" was selected as the Preferred Method of Notification.

FAX – Enter the contact's fax number, if appropriate. Personal Identification Number – Enter the organization’s personal identification number. This number can be obtained from your taxing authority.

Business Terminated This Year – Select this check box if the organization ceased operations during the current tax year.

Other Federal Tax ID Used this Year – Enter any other federal tax ID used for the organization during the tax year.

Third Party Sick Pay Payer – Select this check box if your organization pays sick pay for another organization.

Income Tax Withheld by Third Party Payer – Enter the total federal income tax withheld by third parties (generally insurance companies) from sick or disability payments made to your employees. This includes all payments made by a Third Party Payer (e.g. Insurance carrier) to your employees. You will manually calculate the amount if applicable.


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Activity 1 – Organization and Electronic Filing Information Open Sage MIP Fund Accounting Administration and select the MIPT organization.

• From the Programs group on the Start menu, select Sage Software > Sage MIP Fund Accounting > Administration.

• The User ID is MIP. • Leave the Password blank. • Select the MIPT organization. • From the Navigator > Settings, select Organization Information. • On the Address tab, change the address to (no punctuation in the address):

Address: 12301 Research Blvd Building IV Suite 350 City, State, and Zip: Austin TX 78759 Voice: 800-555-5454

• On the Electronic Filing tab, change the contact information:

Preferred Method of Notification: E Name: <Insert Your Name> E-mail: [email protected] Identification Number: 78759678

mailto:[email protected]


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Setting up a 1099 Vendor Before you can issue a 1099, a Vendor must be set up as a 1099 Vendor. This is done on the 1099 Tab of the Maintain Vendors screen: Navigator > Accounts Payable > Maintain Vendors. The fields on this form will be grayed out until you check the Issue 1099 for this Vendor box. If you have a vendor for whom some transactions are 1099 transactions and some are not, you should still check this box. You will indicate the appropriate 1099 box number when entering detail transaction line items, thus a specific transaction can be part 1099 and part non-1099, as indicated by the 1099 box number on each transaction line. After you check the box, the options for the 1099 will become available. This form has changed significantly. One change is the State Withholding Collected Checkbox. If you intend to withhold State taxes for this vendor, this box should be checked and the related State and State Tax ID fields should be completed. See 1, below. The most important thing to take note of is the 1099 Form Setup Box. This is where you will designate the type of 1099 Form the vendor will receive, 2 below, as well as the default box number, 3 below. The available form types are: MISC, DIV, INT, and R. The choices of the Default Box Number will change depending on the Default Form Type selected.


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Entering Data with 1099 Information When you post the appropriate information to a vendor, the amount coded to the specified 1099 box will be increased/decreased as appropriate. In order for a transaction to affect the 1099 balance it must meet the following criteria: Coded to a vendor that is flagged as a 1099 vendor at the time of data entry The transaction must be coded to a Cash type GL account The transaction lines have values other than “N/A” for 1099 Box(es) at the time of posting

Transactions coded to an Expense or A/P type account will NOT affect a vendor’s 1099 Balance. Only the Cash portion and amount of a transaction affects a 1099 balance. In the case of AP invoices, the 1099 information must be entered to the Expense/AP accounts in order to flow through to the check and onto the 1099.

Withholding When withholding Federal or State Income Tax, make sure you credit your liability account and debit your expense accounts properly. Withholding will show in the 1099 Preparer Grid as a positive number if it has been entered correctly.


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1099 Adjustments Enter any required manual adjustments which will be added to 1099 transaction line items you post in the Application. This might be used to enter 1099 startup amounts if you implement the Application sometime other than the first of the calendar year. You must enter a valid Year, 1099 Type, 1099 Box Number, and Amount for each line. You can make adjustments for each type of 1099 form separately. If you make multiple adjustments to the same Year/Type/Box combination, the Application will combine all of them into one line when you save the form. If you need to change an adjustment you can use the existing line and change the amount. If you need to remove the adjustment, select the entire line and hit Delete on your keyboard.

NOTE: The amount put into this box should be the amount you wish to add/subtract, not the total the value the box on the 1099 should be. For example if you had $45.00 in Box MISC-01 and the total at the end of the year should be $245.00 on the 1099-MISC form, you would enter an adjustment for $200.00. These adjustment amounts will show up in your financial reports separately. If you wish to see the total amount paid to any vendor, be sure and select a report that allows you to include 1099 Adjustments in the available columns.


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Important things to remember about MIP Fund Accounting and 1099’s • It is not necessary to perform any close or other procedure to end the 1099-year for vendors.

1099 totals are associated with a tax year according to the effective date of the A/P Check or Disbursement Check issued to that vendor. Only checks issued with a valid 1099 box in the document transaction lines will be used to compute the annual 1099 total.

• If a vendor was not marked as a 1099 vendor at the time a check was issued and posted, that document will not be included in the 1099 total for that vendor. Changing the vendor’s status will not retroactively adjust the annual 1099 total for documents issued before the change.

• Manual vendor 1099 adjustments (added on the 1099 Information tab of the Maintain> Vendors screen) will be combined with the calculated total. The adjustment will not replace the calculated value. For instance: If a vendor’s computed 1099 total for box 7 is $1,000 and it actually should be $1,500, an adjustment of $500 should be entered.

• Remember only posted A/P checks or Disbursement checks will be included in the 1099 totals. Invoices entered for vendors that have not been paid will not be included in the calculated total (even though a 1099 box was indicated at the time the invoice was created).


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Verify 1099 Information Prior to beginning the 1099 process, it is important to verify the information that will be included on the 1099 tax forms. Several reports will aid in the verification process.

Activity 2 – Create Vendor Information List Report Determine how many vendors we have identified to receive 1099s. We’ll do this with a report, Vendor Information List.

Open Sage MIP Fund Accounting Accounting and select the MIPT organization.

The User ID is MIP with no password

Select the MIPT organization

From the Navigator, select Accounts Payable

From Process Manager - Reports, locate the Vendor Information List reports and create a new report.

Setup tab:

Report Name: 1099 List 2008

Content tab:

Run the report to screen. Save the report. Close the report form.


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We need to review vendor 1099 adjustments and expected balances. We will use reports to verify activity with the Vendor 1099 Adjustment List and the Cash Journal. Adding these two reports together should give the total that Aatrix® is pulling into the preparer grid.

NOTE: The cause of most discrepancies is from transactions recorded for the vendor before it was checked as a 1099 vendor or with a default box code of”N/A”. To get this information into the 1099, make an Adjustment on the 1099 Information tab of the Maintain > Vendors screen.

Activity 3 – Create a Vendor 1099 Adjustment List Report To check the values that were contributed by adjustments, we will go to the Vendor 1099 Adjustments reports.

From Process Manager - Reports, locate the Vendor 1099 Adjustment List reports and create a new report.

Setup tab:


Content tab:

Filter tab:

Selected Filter: 1099 Adjustment Year = 2008



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Activity 4 – Create a Cash Journal Report To check the values that were contributed by transaction entry, we will run a Cash Journal report.

From the Report Manager, locate the Cash Journal (under transaction reports and journals).

Setup tab:


Current Transaction Dates: Custom // From: 1/1/2008 Through: 12/31/2008

Content tab:

Filter tab:

Selected Filter: Vendor Issue 1099 = Yes

Options tab:

Miscellaneous: Select Summarize Amounts



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Processing 1099s Before you can process 1099s you will need to make sure you have access to the menu item. In the navigator, it is in Accounts Payable > Produce Vendor 1099s. If you do not see this menu item, you or your administrator will need to grant rights to that menu item in the Administration Module.

Activity 5 – Prepare 1099s On the Navigator Screen, select Accounts Payable, and then, Click on Produce Vendor 1099s.

Upon viewing for the first time, a message will come up to inform you that the process has changed. There is a link that will take you to a free webcast that gives you an overview of the changes and the 1099 process. You will need to register to view the webcast.

NOTE: This is a one-time message per user. After you click OK, it will not come up again. It is strongly recommended that you view the web cast before continuing with your 1099s. If you elect to skip the webcast, you can view it through Help under ‘What’s New…’ at any time.

After viewing the message, click OK to continue.


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After clicking OK, the Application will take you to the 1099 selection page. This page is where you choose what type of 1099 you wish to print, for what time period to print it, and any filters you wish to apply to the list of vendors for whom you wish to print 1099’s.

Select: Form Type Choose New. This indicates that this is the first time you are processing and printing and that you want to calculate the numbers from scratch. Choosing the History Option will pull of a list of previously calculated or printed forms and would be used if you wanted to reprint a previously printed form. Form Choose the type of 1099 you wish to print. For this Activity, choose 20071099-MISC. (The 2008 form was not available at the time of this writing.) Year This is the calendar year you wish to pull your information from. You can choose prior years but the information will be processed and printed in the current year 1099 format. Enter 2008. Filters Select any criteria you wish to use to filter the vendors you want to print 1099s for. If you leave it blank it will calculate 1099s for ALL vendors that are flagged as a 1099 vendor of the type you are calculating (i.e. a 1099-DIV vendor will not calculate when you select a 1099-MISC form type). Do not select any filters for this Activity.

After selecting your criteria you will click OK at the bottom of the screen. You may be prompted for a mandatory or optional update. This may include updates to the forms you are trying to process. It is recommended that you download all updates. After installing the update, the Application will calculate the 1099s. Depending on the number of vendors and your filters, this process may take just a few seconds to several minutes. After the calculation is complete the 1099 Wizard will open.


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Click Next to get the checklist.

After reviewing the checklist, click Finish. This will bring up the 1099 Preparer Grid. It is similar to an Excel spreadsheet in appearance and allows you to review and modify the 1099 Information.


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Verify the highlighted information, and then click Next Step at the top of the screen to continue the step-by-step verification process. This will take you through a series of verifications. Each Step is labeled in the upper left of the screen to tell you what to verify. Click Next Step after each step to move forward. Making Changes If you find information that is incorrect, you can make changes to them directly in the preparer grid. Be aware however that this WILL NOT update your information in MIP Fund Accounting. If you make a change here and exit without saving, these changes will be lost for this batch of 1099s. For best results, you should make note of the changes that need to be made, exit the 1099 preparer grid, and then make changes in MIP Fund Accounting. Once the changes have been made, you may begin the 1099 process again and the corrected information should be pulled into the grid. Be sure to select NEW to create a new calculation file and not pull the history file with the incorrect information. After you proceed through all the verification steps successfully, the 1099 Filing Wizard will open. Click Next to open the Payer information page.


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The first screen lists all the required information for filing. There may be several required fields that are not filled in by default. They are marked with an “*”. Fill in any blank required fields.

The process is complete. After clicking Next, you will open the Processing Options window. Your next step would be to choose which option you want to use to print/file your 1099 and 1096 forms.

This concludes our Hands-on Lab. Please refer to the KnowledgeBase (KB) Article 283086 for further information on completing an Enrollment form with Aatrix and the related instructions for preparing your forms for eFiling. Check the KnowledgeBase regularly for further updates and information.

Thank you for your participation!


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Addendum How much does it cost to eFile my State/Federal forms?

Filing/Form Description Price

Federal 1099’s eFiling service for Federal 1099’s

FREE

State 1099’s eFiling service for State 1099’s $0.49 per vendor

Complete 1099 Service File Federal 1099’s, all State 1099’s, print, stamp, and mail all vendor 1099’s

$1.69 per vendor NOTE: $1.44 per vendor if eFiled by 1/15/09

- A $19.95 minimum applies to all filing fees except where the price is Free.

New Tax Forms and eFiling for 1099’s - Sage Accounting ... · New Tax Forms and eFiling for...

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