1099 Information Package

There's some setup and configuration required to manage 1099 and 1096 information in xTuple ERP. However, once you have the initial setup done, several built-in reports enable you to extract needed reporting for your tax returns.

Overview

This article covers xTuple's display of the information on all 1099s and 1096s in your database.

  • A 1099 form is comprised of documents with payment information for independent contractors, government payments, interest payments, etc. On that same note, 1099-MISC forms come into play to report on miscellaneous income that 1099 forms do not usually cover.
  • A 1096 is a form that totals up all 1099s and 1099-MISC forms in your database. The 1099 information package is designed to create, organize, and describe various tax and payment accounts. It is mainly used in assisting the management of the creation of 1099s.

1099 form information is determined based on the combination of vendors marked as 1099 recipients and general ledger (GL) accounts marked to be included in 1099 amounts. In this section we will explore all of the options the 1099 information window gives us, as well as learn about tax options for vendors and how to create tax authorities.

Information for 1099s

 xTuple presents many options for handling 1099's in the database. To open the "Info for 1099's" window, use the following steps:

  • Locate the "Accounting" module from the top menu
  • Go to the "Tax" submenu
  • Go to "Reports" from the list
  • Select the "Info for 1099" option:

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Info for 1099s

The main window is pictured above. All information presented here is based on the payments within the date range entered into the "From Date" and "To Date" fields.

We will cover all the options the "Info for 1099's" window presents to us:

  • Summary 1099
  • Summary All
  • Detail 1099
  • Detail All

First, let's choose the "Detail all" option and click QUERY. This lists all the vendors' information according to the columns shown in the window.

Detail All

Let's start by clicking on the "Select Accounts" button to the right of the window:

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Clicking on the “Select Accounts” button opens the "Accounts for 1099 Report" window. From here, you are able to select which accounts are to be added or removed from the 1099 list. The accounts are organized by expense number, which is used to indicate what kind of account it is.

Accounts for 1099 Report

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Next, we'll explore the "Select Vendors" option. Click the "Select Vendors" button while a vendor is selected in order to toggle between YES and NO in the "Gets 1099" column. This shows the vendor's 1099 status, which indicates if they are getting a 1099 or not:

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If we were to navigate to the "Vendors" window we could see how the vendors are marked to receive 1099's:

  • Locate the "Accounting" module
  • Go to the "Accounts Payable" submenu
  • Select the "Vendors" option to open the "Vendors" list
  • Choose the vendor you've selected to receive or not receive a 1099, for this example we used "DMFG"
  • Go to the "Tax" tab:

Vendors

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Depending on whether you marked the vendor to receive a 1099 or not, this window will be updated accordingly. You can also visit this window to mark a vendor manually, if needed. Here you can also see a list for tax registration numbers, which you can add using the NEW button. Doing so will open the "Tax Registration Information" window:

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Here you can create or edit information for a vendor. This includes choosing a tax zone, a tax authority, and adding or editing a registration number. More information about tax authorities and tax ID numbers will be covered later in this document.

Detail 1099

Next, let's look at the "Detail 1099" option. This option filters out the "Vendor Payment Information" box to display only the vendors that are receiving the 1099 forms. These are the vendors that have a "YES" in the "Gets 1099" column.

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Note: The "Detail 1099" option only displays vendors that are marked to receive a "1099-MISC" and accounts marked to be included in 1099 totals.

Summary All

Next, select the "Summary All" option to display the total of payments by vendor, as displayed below:

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Summary for 1099

Lastly, we'll select the "Summary 1099" option to display the total payments for those vendors marked to receive a "1099Misc" for those accounts to be included in 1099 payments.

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When "Summary 1099" is selected, the “Print 1099” and “Print 1096” buttons are displayed, as seen above. These buttons give us the option to print out their respective forms.

Tax Authority

Now that we've seen the detailed reports and summaries for 1099s, let's explore the significance of defining a tax authority for 1099s. 

First, let's open the "Tax Authority" window in order to create a 1099 tax authority code. We can find the "Tax Authority" window by using the following steps:

  • Locate the "Accounting" module
  • Go to the "Tax" submenu
  • Select the "Tax Authorities" option
  • The "Tax Authorities" window will open, choose the "New" option 
  • A new "Tax Authority" window will open, enter in the data shown below:

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Once the data above is entered and saved, a tax authority coded “1099” is created. This tax authority will serve two primary purposes:

  1. It can be linked to the vendor record of all your 1099 vendors, with a reference on each record to that vendor's tax ID number
  2. The tax authority serves as the payer of any 1099 reporting you need to submit.

Looking at the tax portion of the vendor master, we can see the tax authority as well as the vendor's registration number (i.e., tax ID number) cross referenced there.

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We have now seen xTuple's capability for handling and recording 1099s. Hopefully, you now have a better understanding of how 1099s are processed in xTuple.