1099 Best Practices David Johnson Senior Consultant

Agenda 1099 IRS Requirements 1099 Penalties 1099 Data in Great Plains

1099-MISC Filing Requirements Report payments that are made in the course of your trade or business, not for profits are required to file. Exclude Corporations, except payments for Legal Services New in 2011: Exclude payments made with credit cards or payment cards.

Box 7: Non-employee Compensation Not your employee Made Payments in the course of your trade or business Made the payment to an individual, partnership, estate, or in some cases a corporation Made payments to the payee at least $600 during the year.

Key Filing Dates Recipients -January 31, 2014 IRS Hard Copy-February 28, 2014 IRS Filed Electronically -March 31, 2014

Failure to File Penalties Filing Date Penalty Per ReturnMax Penalty Small Business Max Before March 30th $30$250,000 $75,000 Before August 1st $60$500,000 $200,000 After August 1st $100$1,500,000 $500,000

1099-MISC Facts Average Completion Time is 18 Minutes 85.5 Million are issued 22.8 Million Hours Annually 2,603 Years spent Annually At $150 per hour the Annual Cost would be 3.4 Billion Dollars

2013 Recommendations Restrict Access to the Vendor File from GP Users Put all Vendors on Hold (do not Inactivate) Request W-9 from all Vendors prior to allowing payments Correctly set 1099 Settings in the Great Plains prior to making payments.

Cards>>Purchasing>>1099 Details 1. Select Vendor ID 2. Default is Tax Type Miscellaneous 3. Must be on Display by Month 4. Adjust the Box as required Note: Amounts can be adjusted independently of actual transaction details.

Tools>>Routines>>Purchasing >>Print Verify your Tax ID Number 2. Edit List can be printed from the print Icon in the upper right corner of the screen. 3. Print forms by using the print Button in the left corner in the screen.

PRINTING YOUR FORMS: THE TRICK MOST PEOPLE DO NOT KNOW

Sources IRS Publication – 2012 General Instructions for Certain Informational Returns IRS Publication – 2013 Instructions for 1099-MISC 2010 Annual Report to Congress - National Taxpayer Advocate IRS CIRCULAR 230 DISCLOSURE: Pursuant to Treasury Regulations, any tax advice contained in this presentation is not intended or written to be used, and cannot be used or relied upon by you or any other person, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any tax advice addressed herein.

David Johnson, CPA Senior Consultant