1099 TRAINING Presented by: Ruth Collins and Jerri Crady, Accounts Payable Jessica Kirby and Lori Dench, Accounting Services November 30, 2018

When you know better, do better. – Maya Angelou An IRS required tax form that aides in identifying the Tax Classification of Vendors for 1099 purposes What are W-9s? A tax report similar to a W-2 sent to certain business classifications that are paid at least $600 cumulatively in any calendar year What are 1099s? AP must report all JCPS 1099 data to the IRS! Incorrect or incomplete vendor data increases our chances of an IRS audit and hefty fines for non-compliance. Why do we need them? 2-3 years ago, Accounts Payable began to receive letters from the IRS of an impending Audit and the possible fines for lack of due diligence with 1099 vendors forcing a change in processes. Began requiring W-9s and IRS Tax Identification Number (TIN) Matching EVERY new request, verifying vendors when changes were requested (address/remit/contacts) Reviewing EPES data 1099 report for those that should be removed Non-1099 report for those that should be added in MUNIS Under WHY: AP submits the 1099 report for the district against both EPES and MUNIS data. We cannot identify 1099 vendors without a correct copy of the vendor’s W-9 and correct reporting in EPES. When you know better, do better. – Maya Angelou

W-9 Basics – Is it Correct? Completed by the vendor, required for every transaction made from your school each year. Most recent IRS updated form from 10/2018 in demo. Other forms are acceptable but all of the required information on this form must be present on any other form submitted. How to tell if the completed form is acceptable? . Move through right side margin Part I – Taxpayer Identification Number (TIN) – only one type acceptable Social Security number or Employer Identification number Accounts Payable uses the Company Name from field # 1. and the TIN for the IRS Matching process. If the two do not match the IRS system, we will contact you and/or the vendor for a corrected form Signature & Dates – MUST be signed and dated WITHIN The PAST YEAR

IS THIS A VALID W-9? This form has all required fields (1,3,5, 6, Part I with a signature and date) completed correctly. This is a valid form and can be processed through EPES or MUNIS as needed.

IS THIS A VALID W-9? Missing Field #3 – No Tax Classification Part 1 – Can’t put #s in both SS# and EIN fields Missing date on the signature line. This form is not valid and will need to be returned to the vendor for correction.

W-9 Basics – Is it a 1099 vendor? Review prior to writing the check. If the vendor meets 1099 classification status, you should have a MUNIS vendor number to include at the end of the name field in EPES; the name should match MUNIS name field, and addresses should match MUNIS. If the name or address differs from MUNIS, please send the W-9 to: jcps-apvendors@jefferson.kyschools.us Two step test Review the tax classification from Field 3 of the W-9 C-corp, S-corp, Trust/Estate or “Other” are NOT 1099 vendors Individual, Partnerships, or Limited-Liability (Partnerships only) MAY be 1099 vendors. Go to step two Is the vendor providing a service or customized goods? No – This purchase does not meet the 1099 requirement for service so the vendor is not a 1099 vendor YES – This is a 1099 vendor. Complete a New Vendor/Change form and submit both forms to jcps-apvendors@jefferson.kyschools.us

IS THIS A 1099 VENDOR? This vendor is presenting an original work during an assembly. In # 3, they check S Corporation. This vendor is not a 1099 vendor.

IS THIS A 1099 VENDOR? This vendor is a 1099 vendor. This vendor is selling t-shirts with school logo and team name imprinted on both sides. This vendor is a LLC – Partnership and as such, meets the Tax Classification criteria. This vendor is a 1099 vendor.

IS THIS A 1099 VENDOR? This vendor is a 1099 vendor. This vendor is selling cheer bows with school letters and mascot added to their basic bow. This vendor is an Individual LLC Tax Classification and as such meets the criteria for 1099. This vendor is a 1099 vendor.

This vendor is not a 1099 vendor. IS THIS A 1099 VENDOR? This vendor is selling boxes to be used for a STEM Project This vendor has a C-corp. Tax Classification and as such does not meet the 1099 criteria. This vendor is not a 1099 vendor.

Review credit card payments* AP REVIEW OF EPES DATA Non-1099 Report Review: Find actual 1099 vendors Review credit card payments* Correct any errors

1099 Report: Revised 1099 Report: Reconciliation: AP REVIEW OF EPES DATA 1099 Report: Remove any vendors not meeting W-9 classification Revised 1099 Report: Enters all applicable detail into vendor records in MUNIS (Jan-Dec) Reconciliation: Matches EPES 1099 data to MUNIS 1099 Report monthly

QUICK TIPS Submit New Vendor Forms and W-9 for new 1099 vendors before writing a check Include Details of the product and/or service received from the vendor (including Credit Card payments) Mark checks to employees correctly when the payment represents a reimbursement or refund

QUICK NOTE ON TRAVEL… Purchasing will accept PO’s for hotel/travel expenses Always provide the most accurate back-up info! For hotels, invoice must show tax charges Check mailed to vendor or picked up by JCPS? Don’t delay sending in the information! From the AP side, we need invoices showing tax charges for the hotel stay. This is best from an In-house Accounting invoice but the reservations details (since Eddie has given the okay to use these) will also suffice. We need these documents and clear information as to whether the check should be mailed to the vendor or will be picked up by JCPS Personnel. When mailing checks directly to hotels, the invoices need to be sent at least two days prior to the check writing date that will allow enough time to clear the mail by the required deadline of the receiving hotel.   A reminder that delays in submitting invoices to AP may leave the traveling employee responsible for the bill if the check is not properly credited to their room or is lost in the mail. Cancelling that check may also delay reimbursement to the employee for the hotel stay. Delays in AP receiving info could leave JCPS employee travelling responsible for the bill

MUNIS VENDOR INQUIRY

EPES VENDOR SET-UP

17-18 YEAR IN REVIEW

THE BIG REVEAL!

REDBOOK REBOOT PIPELINE