About IRS Form 1099 Reporting

In the United States, businesses and nonprofit organizations must use IRS Form 1099-MISC to report certain payments made in the course of trade or business. This requirement applies only to payments that either exceed the threshold amount specified by law or are subject to backup withholding of federal income tax, or both of these. The IRS may impose penalties for noncompliance.

To help you meet these requirements, U.S. versions of IFS Financials enable you to specify the suppliers that are subject to Form 1099-MISC reporting. For each of these suppliers, you must enter the information that will appear on the Form 1099-MISC, including the taxpayer identification number, address, and phone number. You must specify the threshold amount for Form 1099-MISC reporting based on current IRS rules. On the supplier invoice, you must specify the IRS 1099 type on each supplier invoice line. If the invoice line is subject to Form 1099-MISC backup withholding, you must enter the tax withholding percentage. The system calculates the amount of the amount of the withholding based on this percentage.

IFS Financials allows you to print three types of Form 1099-MISC reports. These reports, which you can select from the drop-down list in Info Services/Order Report, are as follows:

• 1099-MISC Summary Report: A report that can be used to reconcile the amounts that appear on the actual 1099-MISC forms. This report is similar to the Vendor 1099-MISC report except that it lists only those payments that meet the Form 1099-MISC reporting requirements. This report can be used as the basis for IRS Form 1096, Annual Summary and Transmittal of U.S. Information Returns.
• Form 1099-MISC Laser Report: A report that is used to print the actual Forms 1099-MISC to be submitted to the IRS and/or state revenue authorities. This report should be printed on the standard IRS form using a laser printer. It will include all above-threshold activity per 1099 supplier for each code type, or all amounts for which federal income tax (box 4) and/or state income taxes (boxes 16a, 16b) were withheld.
• Vendor 1099-MISC Report: A summary report of all Form 1099-MISC activity. This report lists amounts paid to all suppliers that have been identified as Form 1099-MISC candidates, regardless of whether these amounts equal or exceed the threshold amount.