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IRS Information Reporting. 1099-MISC. Introduction. Steps the Wing Should Take 1099-MISC Prizes and Awards Rent and Royalty Payments Services Attorney Payments Final Notes Questions. Steps the Wing Should Take.

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Presentation Transcript

Introduction l.jpg
Introduction

  • Steps the Wing Should Take

  • 1099-MISC

    • Prizes and Awards

    • Rent and Royalty Payments

    • Services

    • Attorney Payments

  • Final Notes

  • Questions


Steps the wing should take l.jpg
Steps the Wing Should Take

  • Be diligent with Accounts Payable postings. The first step is having correct information.

    • Have only one vendor card for each vendor.

      • Your WFA can merge vendor cards if more than one card exists for a vendor.

    • Verify that transactions posted are accurate.

    • Indicate 1099 Eligible Vendors in QuickBooks

      • This can be done by editing the vendor and checking the 1099 option under the “Additional Info” tab.

      • Add the vendor Taxpayer ID information to QuickBooks


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Vendor Edit Screen

Enter vendor Tax ID from W9 here

Check this box if vendor is eligible for 1099 reporting


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Steps the Wing Should Take

  • Decide which vendors should receive a 1099-MISC

    • Obtain Form W-9 from vendors

      • The Form W-9 can be used as a tool to obtain the necessary information from vendors. It will also help determine if payments to vendors are reportable.

      • A Form W-9 should be obtained from all vendors and kept on file at wing headquarters.


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W-9 Example

Vendor should choose one business type.

Vendor should enter one TIN number. This number should match their annual tax returns.


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Steps the Wing Should Take

  • Determine the amount to be reported on each 1099-MISC

  • Provide all information needed to file your 1099-MISC Forms to your WFA. A spreadsheet will be provided that will aid in consolidating the information.

    • All information should be provided no later than Jan 15th for the preceding calendar year.

    • NHQ will file all 1099-MISC Forms to the IRS, state tax authority, and recipients


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1099-MISC

  • Required for the following

    • Prizes and Awards

    • Rent and Royalty Payments

    • Services performed by individuals who are not employees and are not incorporated

    • Gross Proceeds paid to Attorneys


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1099-MISC Example

Civil Air Patrol

105 South Hansell Street

Maxwell AFB AL 36112

334-953-7748

All of the information for the recipient must match their annual income tax return


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Prizes and Awards

  • Reportable amount:

    • $600 per calendar year

  • Information needed:

    • Individual’s name and address

    • Individual’s Social Security Number

    • Total amount of all prizes and awards paid to the individual during the year

  • Example:

    • Flight scholarships or any other cash awards to members

      • Scholarships are considered awards unless paid to a candidate to attend an educational institution for a degree


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Rent and Royalty Payments

  • Payments made to corporations and governments are not required to be reported

  • Reportable amount:

    • $600 per calendar year for Rent

    • $10 per calendar year for Royalties

  • Information needed:

    • Name and address that the vendor uses to file their annual tax return

    • Taxpayer Identification Number that the vendor uses to file their annual tax return

    • Total amount of all rent or royalty payments paid to the vendor during the year.

  • Example:

    • Hangar rental, office rental, or storage rental


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Services

  • Payments made to corporations are not required to be reported.

  • Reportable amount:

    • $600 per calendar year

  • Information needed:

    • Name and address that the vendor uses to file their annual tax return

    • Taxpayer Identification Number that the vendor uses to file their annual tax return

    • Total amount of all payments made for services to the vendor during the year.

  • Example:

    • Catering, facility cleaning, lawn care, or pest control


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Attorney Payments

  • Payments made to corporations must still be reported.

  • Reportable amount:

    • Reportable for any amount paid per calendar year

  • Information needed:

    • Name and address that the vendor uses to file their annual tax return

    • Taxpayer Identification Number that the vendor uses to file their annual tax return

    • Total amount of all payments made for services to the vendor during the year

  • Example:

    • Retainers and legal fees paid to law firms


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Some Final Notes

  • All forms must be filed with the same information as the individual or business uses to file their income taxes each year

    • Sole Proprietorships should be sent in the individual’s name, not the business name

    • Forms sent to individuals should contain their social security number, not an employer identification number.

  • All information should be reported by calendar year, not fiscal year

  • The Wing is responsible for obtaining all information via Form W-9.

    • The IRS penalizes $50 per form for incorrect information filed on 1099 Forms that are not supported by a W-9.


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If You Get Stuck or Need Help

  • Contact your Wing Financial Analyst or Financial Management at National Headquarters!