1 / 40

1099-MISC REPORTING / CORRECTION REMINDERS

1099-MISC REPORTING / CORRECTION REMINDERS. DOA – State Accounting Bureau December 2010. 1099 MISC Deadlines and Dates. January 14 th 2011 Last day for agencies to make1099 adjustment for 2010 and 2011 Submit Interface 1099 Misc files This includes State Fund/DPHHS interface files

forest
Download Presentation

1099-MISC REPORTING / CORRECTION REMINDERS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 1099-MISCREPORTING / CORRECTION REMINDERS DOA – State Accounting Bureau December 2010

  2. 1099 MISC Deadlines and Dates • January 14th 2011 • Last day for agencies to make1099 adjustment for 2010 and 2011 • Submit Interface 1099 Misc files • This includes State Fund/DPHHS interface files • January 31 2011 • 1099 MISC forms are mailed to payee’s • February 28th 2011 • 1099 MISC File is sent to IRS • March 1st 2011 • Agencies may make adjustments for current year 2010 1099-MISC Reporting / Correction Reminders

  3. How 1099 MISC payments are reported • Mark voucher at time of payment • Manual Adjustments • Adjustments done by WWU • Correction/Duplicate 1099 Information form • Interface 1099 data files 1099-MISC Reporting / Correction Reminders

  4. Manual Adjustments • Enter Vendor Set ID • State or • HHS01 etc • Enter Vendor ID • Hit search 1099-MISC Reporting / Correction Reminders

  5. 1099-MISC Reporting / Correction Reminders

  6. Adjustments - Calendar Yr 2010 • Enter Business Unit • Enter Start Date (01-01-2010) • Enter End Date (12-31-2010) • Click Search 1099-MISC Reporting / Correction Reminders

  7. 1099-MISC Reporting / Correction Reminders

  8. Changing Dollar Amount • Add row (+) on line to be adjusted • Change to correct BU • Change amount • Make positive if adding • Make negative if removing • Change date to original payment date • Example (payment date 01-14-10 date if adjustment should be 01-14-10) 1099-MISC Reporting / Correction Reminders

  9. 1099-MISC Reporting / Correction Reminders

  10. Changing Dollar Amount (cont) • Go to Adjustment reason TAB: • Type Reason • Example “payment not reportable” or “marked in error” • Be sure to include your name @ BU, INTL, DATE and Save. 1099-MISC Reporting / Correction Reminders

  11. 1099-MISC Reporting / Correction Reminders

  12. Change Withholding Box # • Add row (+) on line to be changed • Change to correct BU, keep the same BOX #, enter amount as negative, change date to same as original date • Add row (+) to the above line • Change BU • Change Box # • Enter amount as positive • Change Date to original date 1099-MISC Reporting / Correction Reminders

  13. Change Withholding Box # (cont) • Fill out adjustment reason TAB • Wrong box # per your name BU, INTL, DATE • Save 1099-MISC Reporting / Correction Reminders

  14. 1099-MISC Reporting / Correction Reminders

  15. Adjustments done by WWU • This is only applicable for prior years and during the consolidation process • Send WWU the Correction/Duplicate 1099 Form • Found online at • http://doaforms.mt.gov/doaforms.asp?Path=/AccountingForms/SABHRS&base • Form must be signed 1099-MISC Reporting / Correction Reminders

  16. 1099-MISC Reporting / Correction Reminders

  17. Interface 1099 MISC Data Files • Send file to SABHRS • Information for file layout is at: • http://mine.mt.gov/content/documentation/sabhrs/financials/IN_1099_Balances_Load • For more information contact Brian Buhr 444-4337 1099-MISC Reporting / Correction Reminders

  18. 1099-MISC Consolidation Process • All applicable payments combined to produce one 1099-MISC, when applicable: • Payments marked 1099 applicable on SABHRS • 1099 Adjustments on SABHRS • Payments made on our behalf interface files • PCard Transactions (State node only) 1099-MISC Reporting / Correction Reminders

  19. Consolidation Process (cont.) • Agency 1 paid $60 reportable in Box 3 • Agency 2 paid $200 reportable in Box 3 • Agency 3 paid $500 reportable in Box 3 • As individual payments, they would not be reportable as they are less than $600; however, with consolidation process a single 1099 will be issued with $760 reported in Box 3 1099-MISC Reporting / Correction Reminders

  20. Box 1 – Rental Payments • Rental/Lease Payments • Land • Buildings • Offices (unless paid to real estate agent) • Conference rooms • Equipment • Rental assistance payments to property owners • 1099 issued if total >= $600 1099-MISC Reporting / Correction Reminders

  21. Box 2 – Gross Royalty Payments • 1099 issued if total >= $10 • Does not include: • Surface royalties (Box 1) • Oil/Gas working interest payments (Box 7) • Timber royalties under a pay-as-cut contract (1099-S) 1099-MISC Reporting / Correction Reminders

  22. Box 3 – Other Income • Reportable damages • Punitive • Nonphysical injury • Discrimination/defamation • FMV of awards/prizes not for services performed • Honorariums • 1099 issued if total >= $600 1099-MISC Reporting / Correction Reminders

  23. Box 3 – Other Income • Damages not reportable: • Received on account of personal injury or physical sickness • Do not exceed amount paid for medical care for emotional distress • Property Claims 1099-MISC Reporting / Correction Reminders

  24. Box 4 – Backup Withholding • Any amount of federal income tax withheld is reportable 1099-MISC Reporting / Correction Reminders

  25. Box 6 – Medical or Health Care Service Payments • Doctors/Dentists • Counselors • Home health care workers • Clinics/Hospitals/Nursing homes • Medical billing services • 1099 issued if total >= $600, even if corporation • Does not include payments to pharmacies to prescription drugs 1099-MISC Reporting / Correction Reminders

  26. Bonuses Commissions Nonemployee professional/technical services or taxable fringe benefits Expert witness fees Legal fees to attorneys in course of business Purchases of fish for resale FMV awards/prizes for services performed Payment for repair parts/services, if parts incidental to repair 1099 issued if total >= $600 Box 7 – Nonemployee Compensation 1099-MISC Reporting / Correction Reminders

  27. Box 14 – Gross Proceeds paid to Attorney/Law Firm • Gross proceeds paid directly to attorney • Reportable even if attorney is a corporation • Includes amount paid for fees, if cannot be separated from settlement • Payment is jointly payable to attorney and client • Full amount must be reported in Box 14 1099-MISC Reporting / Correction Reminders

  28. IRS TIN Matching • Ensures that correct Name/TIN combination • Should reduce number of CP2100 items (or B Notices) • Names of vendors file should follow policy guidelines • Sole Proprietors – individual not DBA name • Legal name of company/corporation 1099-MISC Reporting / Correction Reminders

  29. TIN’s required • Per 2-1655.40 will be required • Unless for refund situations • W-9 required - • For US persons or corporations • Substitute W-9 will be placed on web for agencies to use • W-8 required - • For foreign individuals or corporations 1099-MISC Reporting / Correction Reminders

  30. Backup Withholding… • Required - • When taxpayer fails to furnish TIN • When IRS notifies Montana payee TIN is incorrect and fails to respond to B Notice • When IRS notifies payer of payee underreporting • Payee TIN certification failure 1099-MISC Reporting / Correction Reminders

  31. Backup Withholding (cont…) • 28% of payment • If Montana fails to report a reportable payment, we are liable for backup withholding requirements for each required 1099 + interest + penalty • This penalty will be passed onto each agency that failed to mark the appropriate payments as 1099 applicable 1099-MISC Reporting / Correction Reminders

  32. Payments made on our behalf • Montana liable for 1099-MISC reporting when: • We have management or oversight: • To who payments are made • When disbursements are made • Who qualifies for disbursements • Amount of disbursements • Payment interface file should be supplied to SABHRS 1099-MISC Reporting / Correction Reminders

  33. Payee does not receive payments • 1099-MISC is still required to be issued to the payee (Beneficial Owner): • When a reportable payment is not made to the payee, but assigned to someone else • 1099-MISC adjustment must be input into SABHRS in regard to “payee” • Payment was offset or partially offset • Payment garnished by non-federal bankruptcy trustee • Payment for claimant payable to attorney, when taxable 1099-MISC Reporting / Correction Reminders

  34. Payments to Claimant/Attorney 1099-MISC Reporting / Correction Reminders • Need to know some idea as to what the payment is being made for (some reportable/some not) • May need to know TIN for both Claimant and Attorney, when reportable • Individual or law firm • If not, Backup Withholding applies • If paid to employee/previous employee, may be W-2 applicable check w/SHRD

  35. Claimants/Attorneys (cont.) • Payments not reportable to claimant if: • Received on account of personal injury or physical sickness • Do not exceed amount paid for medical care for emotional distress • Property Claims • Payments reportable if: • Does not fall into nonreportable categories, always includes punitive damages • Reportable damages paid to a attorney, even if corporation 1099-MISC Reporting / Correction Reminders

  36. Payments to Attorneys Box 7 Reportable Box 14 Reportable Services not performed in course of business for us If name on check Corporate exemption does not apply Interest reported on 1099-INT (agency does) • Services performed in course of business for us (nonemployee) • Corporate exemption does not apply • Interest reported on 1099-INT (agency does) 1099-MISC Reporting / Correction Reminders

  37. Other attorney payments not reportable (Box 14) … • Attorneys acting as closing agents in real estate transactions • Attorneys appointed by the federal bankruptcy court to act as trustee 1099-MISC Reporting / Correction Reminders

  38. Multiple 1099’s for same payment? YES 1099-MISC Reporting / Correction Reminders • If payment to a claimant is taxable, but is paid to the attorney – • Reported in Box 14 in regard to the amount paid to the attorney • Reported in Box 3 in regard to the claimant • Must be added to SABHRS as an adjustment

  39. Claimant Some/Attorney Some • If a claimant is awarded $100,000 for and wants their attorney paid $30,000. The claimant receives a check for $70,000. • Reported in Box 14 in regard to the amount paid to the attorney • Reported in Box 3 in regard to the claimant • Must be added to SABHRS as an adjustment for amount paid to attorney 1099-MISC Reporting / Correction Reminders

  40. To ensure compliance with requirements imposed by the IRS, any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the IRS code. IRS Circular 230 Notice 1099-MISC Reporting / Correction Reminders

More Related