GPUG ® Summit 2011 November 8-11 Caesars Palace – Las Vegas, NV 1099 Reporting Best Practices...

GPUG® Summit 2011November 8-11

Caesars Palace – Las Vegas, NV

1099 Reporting Best Practices

Zubin Gidwani, Dynamic BudgetsMike McDowell, Sta-Home Health & Hospice

GPUG Summit 2011– Las Vegas www.gpug.com

Agenda

Summary of Recent Changes in Reporting Requirements

Understanding How GP Records 1099 Amounts

Validating Data

TIN Matching

3 approaches to managing 1099s Printing / Filing

Q & A


1099 filing for Purchase Card transactions (Corporate Credit Cards) will shift from end-user organizations to the financial institutions

(except for federal, state and large local governments to report all payments through any payment method)

http://www.napcp.org/news/48517/IRS-releases-final-regulations-related-to-1099-reporting-changes-for-2011.htm

Proposed Health Care Bill Expanded Reporting Changes for 1099s




Understanding how GP records1099 amounts

1099 amounts are stored in the vendor summary records

AP determines transaction by transaction where amounts record

Prior to GP 2010, Utilities in PSTL to update 1099 amounts

GP2010 - Update 1099 Information Tools-Utilities-Purchasing-Update 1099 Information

Recording manual adjustments to 1099 Details


Vendor Cards

From the Vendor Card you go into Options to view the Tax Type and 1099 Box


Routing 1099 amounts at Transaction Entry


1099 Details

As the transactions post the system updates the YTD 1099 Summary amount on the vendor record

To view & Edit 1099 detail information:

Cards -> Purchasing -> 1099 Detail

To view 1099 detail: Inquiry -> Purchasing -> Vendor

1099 Details


Why would a 1099 Summary be wrong?

The Vendor Summary buckets update with appended amounts from each transaction as the transaction posts.

You can change a vendor’s “1099 Type” at will, as many times as you wish.

Prior posted transactions do not change automatically, new posted transactions will accumulate in the new bucket…


How do you fix a 1099 Summary if its wrongGP 2010 Update 1099 Information Utility

Tools -> Utilities -> Purchasing -> Update 1099 information


How do you validate Amounts & Recipients

Recipients (start with Smartlists)– Addresses– Formal Name per IRS records– TaxID

Box Types

1099 vs non-1099 qualified payments to 1099-vendors


If you don’t “Trust” your 1099 summaries, you can review transaction summaries with the following SQL Query

Disclaimer: SQL Scripts can damage or destroy data. Use these scripts with caution on a test system first. Backup your database before using.

Use the following script is at your own risk. We take no responsibility for any harm or data loss caused by these scripts nor do we warranty the validity of the results.

The script is provided to assist your 1099 research activities, and must be independently validated against core system reports should you attempt to use these for final data extraction.

Compare Transaction Summaries to 1099 Amounts


SELECT TOP (100) PERCENT CAST(DB_NAME() AS char(5)) AS CompanyDB, dbo.PM30200.VENDORID, SUM(dbo.PM30200.DOCAMNT) AS SumOfDOCAMNT, dbo.PM00200.VNDCHKNM, dbo.PM00200.ADDRESS1, dbo.PM00200.ADDRESS2, dbo.PM00200.CITY, dbo.PM00200.STATE, dbo.PM00200.ZIPCODE, dbo.PM00200.PHNUMBR1,dbo.PM00200.TXIDNMBR, dbo.PM00200.VENDSTTS, dbo.PM00200.TEN99TYPE, SUM(dbo.CM20200.TRXAMNT) AS SumofTrxAmt, dbo.CM20200.CHEKBKID, dbo.PM00200.USERDEF1

FROM dbo.CM20200 INNER JOIN dbo.PM30200 ON

dbo.CM20200.CMTrxNum = dbo.PM30200.DOCNUMBR AND dbo.CM20200.CHEKBKID = dbo.PM30200.CHEKBKID INNER JOIN dbo.PM00200 ON dbo.PM30200.VENDORID = dbo.PM00200.VENDORID

WHERE (dbo.PM30200.DOCDATE > CONVERT(DATETIME, '2009-12-31 00:00:00', 102)) AND (dbo.PM30200.DOCDATE < CONVERT(DATETIME, '2011-01-01 00:00:00', 102)) AND (dbo.PM30200.VOIDED = 0) AND (dbo.CM20200.VOIDED = 0)

GROUP BY dbo.PM30200.VENDORID, dbo.PM00200.VNDCHKNM, dbo.PM00200.ADDRESS1, dbo.PM00200.ADDRESS2, dbo.PM00200.CITY, dbo.PM00200.STATE, dbo.PM00200.ZIPCODE, dbo.PM00200.PHNUMBR1, dbo.PM00200.TXIDNMBR, dbo.PM00200.VENDSTTS, dbo.PM00200.TEN99TYPE, dbo.CM20200.CHEKBKID, dbo.PM00200.USERDEF1HAVING (dbo.PM00200.TEN99TYPE > 1) AND (SUM(dbo.PM30200.DOCAMNT) >= 600)

ORDER BY dbo.PM30200.VENDORID

(TEN99Type>1 will exclude “not 1099” vendors)

Sample SQL Query for 1099 amounts based upon Payables Transactions


Best Practices: Tin Matching

As Part of your Vendor Maintenance: Perform Tin Matching as part of the New vendor creation

process “Offer” to withhold payment until correct information is

submitted and validated Near final bulk TIN match in December

– Double Check record validity– Validate EIN vs. SSN number format– Review for appropriate box types (rent, medical)– Reminder: Box 14 Gross Proceeds paid to an attorney is

for legal settlements only. Legal Services are recorded under Box 7 non-employee compensation


Why Tin Match Requirement for Payer To Secure a TIN

Initial solicitation - for all payees, you must make the initial solicitation when the payee opens an account or when the transaction occurs using Form W-9 to request the taxpayer identification number.

The CP2100 or CP2100A NoticeCP2100 and CP2100A notices are notices that inform a payer that he or she may be responsible for backup withholding. This may be due to missing or potentially incorrect taxpayer identification numbers identified during the processing of Form 1099 information returns. It is accompanied by a listing of missing, incorrect, and/or not currently issued payee TIN. Large volume filers (250 or more erroneous documents) receive the CP2100 notice, while all other filers receive the CP2100A notice.

Payers face potential fines of $50 per each 1099 filing with a missing or invalid TIN

"B" NoticeIf the IRS sends you a "B" notice indicating an incorrect payee TIN, you are required to backup withhold28% from a payee no later than 30 days after receipt. Backup withholding until the payee furnishes a TIN and certifies that it is correct.


IRS Tin Matching Various 3rd parties will submit on your behalf (~$135 for up to 100,000

records)

Free through IRS e-services– Program Summaryhttp://www.irs.gov/govt/tribes/article/0,,id=131207,00.html

– TIN Matching tutorialhttps://la2.www4.irs.gov/PeopleBooks/CRMPROD/Training/3pdev/3ptin/tinbulk1.htm

Required IRS e-services Personal Registration Information– Legal name (verified with IRS & SSA records) – Social Security Number (verified with SSA records) – Date of birth (verified with SSA records) – Telephone number , E-mail address – Adjusted Gross Income (AGI) from either your current year or prior year filed tax

return (verified from IRS records) – Home mailing address (verified from IRS records). If you have moved since you

last transacted with the IRS, please update your information when registering.

http://www.irs.gov/govt/tribes/article/0,,id=131207,00.html

https://la2.www4.irs.gov/PeopleBooks/CRMPROD/Training/3pdev/3ptin/tinbulk1.htm


TIN MatchingThe TIN Matching e-services allow “authorized payers” the opportunity to match 1099 payee information against IRS records prior to filing information returns. An authorized payer is one who has filed information returns with the IRS in at least one of the two past tax years.

Interactive TIN Matching will accept up to 25 payee TIN/Name combinations on-screen

Bulk TIN Matching will allow up to 100,000 payee TIN/Name combinations to be matched via a text file submission.

Both programs will: Match the payee with W-9 name and TIN with IRS records; Decrease backup withholding and penalty notices; Reduce the error rate in TIN validation.

The TIN Matching system is accessible 24 hours a day, 7 days a week.


TIN Matching Results

Tin1 Name 1

Tin2 Name 2Tin3 Name 3

Tin4 Name 4


The only TIN Match solution built specifically for Dynamics GP…

The Validator1099 automates the process of validating TIN’s for expedited and accurate 1099 processing.

Automatically perform a three way comparison between GP vendor data and current government/IRS data.

Automatically identify whether or not vendors provided erroneous TIN’s, false names, bad addresses or has relocated, changed names or started-up under a new TIN.

Catch the issues early and minimize, if not eliminate, your risk in reporting bad information to the government.

OVERVIEW


Automated TIN Matching

Eliminate errors w/ 1099 reporting

Stop waiting months to know if the TIN’s filed against were accurate

Stop wasting time manually tracking down inaccurate or erroneous details

Stop paying fines to the government for incorrect 1099 data

Confidence that 1099’s are filed w/ accurate data

The only TIN Match solution built specifically for Dynamics GP…

BENEFITS PRICING

Customers must subscribe to the US Government web-based TIN Match Service

Includes the first year's enhancement and support plan, renewals are based on 20% of current retail price.

Includes 1 hour of service for installation, configuration, testing and training


3 Methods for 1099 Reporting

1. Native Dynamics GP Printing & manual filing

2. Greenshades –GP integrated software with service bureau offering

3. 1099Pro – stand-alone software with service bureau offering


Native Dynamics GP 1099 Process

Allows you to print 1099s for recipients

Does not generate the Federal summary report, it has to be manually created, it isn’t created in GP….

Must manage filing or efiling process on your own


Printing 1099

To Print: Tools-> Routines -> Purchasing -> Print 1099

Enter your Company information to be printed

You can print all Vendors or enter a range

Print option for printing an alignment only form


Edit 1099 Form

If the form alignment does not match your forms you will need to print to screen and edit in report writer. From the screen shot of the alignment form Click ‘Modify’

Once changes are made File->GP will return you to GP


Look for changes in forms with GP software updates

For the 2010 year end, an updated 1099-INT form was released introducing a new box 10, and changing the positioning of boxes 8/9. Such changes are typical each year, so be sure to refer to Year End updates to ensure your program is up to date:

Sample Links:GP2010 Year End Update

https://mbs.microsoft.com/customersource/downloads/taxupdates/usgpye2010.htm?printpage=false&stext=2010 1099-INT

GP10 Year End Updatehttps://mbs.microsoft.com/customersource/downloads/taxupdates/usgpye10.htm?printpage=false&stext=2010 1099-INT

GP9 Year End Updatehttps://mbs.microsoft.com/customersource/downloads/taxupdates/usgpye9.htm?printpage=false&stext=2010 1099-INT


Greenshadeshttp://www.greenshades.com

An integrated GP Module for W2 and 1099 printing and efiling

http://www.greenshades.com/


Year End Forms Printing Prints recipient copies of Federal W-2 and Federal 1099s

directly to Blank Paper Perforated Paper and Envelopes available Print all forms, single form, or range of forms

– www.downloadmyform.com Search information on forms to print Secure administrator controls over all functionality Single source management of forms distribution,

corrections and changes Full reporting functionality including:

– Employee requested changes– Print history– Electronic filing confirmations– Totals by company, state, dept or many more

http://www.downloadmyform.com/


Administrator Control Screen


Forms Editing

• Edit Form Information in Visual Forms Viewer• Error Checking and Auto-Summing Fields


Recipient Distribution Offer electronic reprints available directly from a recipients

home/office computer Print, Edit, and Re-issue easily Perforated Paper and Envelopes available Mail Service

– Printing, stuffing, and mailing– Includes postage for as low as $1.05 per form


Employee Access Screen


Cost Comparison Greenshades & 1099Pro


1099Pro

http://www.1099pro.com Stand-alone software alternative Allows you to print on plain paper Turnkey Service Bureau offering Web presentment SAS 70 certified

(if you have SOX/IT/Audit requirements)

http://www.1099pro.com/



1099Pro Import Template(tab delimited files from Excel)• Rcp TIN• Last Name/Company• First Name• Name Line 2• Address Type• Address Deliv/Street• Address Apt/Suite• City• State• Zip• Country• Rcp Account• 2nd TIN notice• Box 1 amount• Box 2 amount• Box 3 amount• Box 4 amount• Box 5 amount

• Box 6 amount• Box 7 amount• Box 8 amount• Box 9 checkbox• Box 10 amount• Box 13 amount• Box 14 amount• Box 15a amount• Box 15b amount• Box 16 amount• Box 17 ID number• Box 17 state• Box 18 amount• Opt Rcp Text Line 1• Opt Rcp Text Line 2• Form Category• Form Source• Tax State


1099Pro Software Interface

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1099Pro form edit screen


Q & A


Dynamics GP enhancement requests

Submit your feedback directly via the connect URL (left) or from the Communities Portal, Resources > Product Suggestions

1. Add Federal Summary Report to support 941 filings

2. Explore eFiling possibility

3. Other?

https://connect.microsoft.com/

https://connect.microsoft.com/


Thanks for joining us!

Please fill out your evaluation

CPE credit is available for GPUG Summit 2011

Follow-up questions?

See you in Houston at Convergence 2012 next March

See you in Seattle for Summit 2012

Browse out to www.gpug.com for more information

http://www.gpug.com/


Feel Free to Contact Us!Zubin GidwaniDynamic [email protected]

Mike McDowellSta-Home Health & [email protected]

mailto:[email protected]

mailto:[email protected]

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