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Author's profile photo Mohammed Kalim

1099-Misc Reporting

                                                       1099-Misc Reporting

This document shows step by step process for executing 1099 Misc Reporting

What is 1099 MISC report?

  • In USA, 1099-MISC is used to report payments for services performed for a business by people not treated as its employees, such as payments to subcontractors, rent payments or prizes.

Business Requirement

  • This is a requirement by Internal Revenue Service (IRS). A 1099-MISC form must be provided to the recipient and a copy mailed to or e-filed with the IRS.
  • Any business that has paid vendor $600 USD or more as a non-employee, or at least $10 USD in royalties, must provide with a 1099-MISC.
  • Copy A of the 1099-MISC form is intended for the IRS. It must be filed by February 28, if sending the form by mail. If it is filed electronically, the last date is March 31.
  • Copy B is sent to the vendor for whom reporting to the IRS by January 31.

Prerequisites:

  • Maintain field “Tax Number 1” with Social Security Number(SSN) in Control Tab of Vendor master data as per the below screenshot.
  • Maintain Field “Tax Number 2” with Employer Identification Number (EIN) in Control Tab of Vendor Master data as per the below screenshot.
  • Maintain “W. Tax Code” in Accounting information Tab of Vendor Master Data as per the below screenshot.

Maintain Social Security Number(SSN) and Employer Identification Number(EIN)  in Vendor Master.

Transaction Code: FK02

SAP2.png


SAP4.png

Maintain Social Security Number for Tax number 1 OR

Employer Identification Number for Tax number 2 in Tax Information tab of vendor master.

Press Enter.


SAP.png

Maintain Withholding Tax Code 07 for Non employee compensation.


Different WT Codes for 1099 reporting.


WT Code

Description

1

Rents

2

Royalties

3

Prizes, awards

4

Federal income tax withheld

5

Fishing boat proceeds

6

Medical and health care payments

7

Nonemployee compensation

8

Substitute payments (dividends/interest)

9

Payer made direct sales of $5000 or more

10

Crop insurance proceeds

11

State income tax withheld


Post FI Vendor Invoice.

Transaction Code: FB60


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  1. Simulate.

SAP.png

Save the Screen.


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Display Posted Document.

Transaction Code: FB03



SAP.png

Double click on vendor line item.


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  1. W. tax base amount and Tax Code have been updated at vendor line item level.

Post Outgoing Payment.

Transaction Code: F-53


SAP.png

Click on “Process Open Items” Tab.


SAP4.png

Simulate and Save the Screen.


SAP4.png

Execute Withholding Tax Report for 1099.

Transaction Code: S_PL0_09000314 (Withholding Tax Report for 1099MISC)


SAP.png

Execute.


Summary of vendors with 1099 amounts will get displayed as below.

(Note: If vendor master is not filled with Tax Number 1/SSN then program neither list the vendor details in the below report nor prints the form).



SAP.png

Click on Line item Icon.

Generic 1099 Reprot (S_P00_07000134)

SAP.pngSAP1.jpg

Execute.

SAP1.jpg

Enter.

SAP.png

I am also looking forward your suggestion if I missed out anything.

Assigned Tags

      17 Comments
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      Author's profile photo vidya sagar
      vidya sagar

      Hi Kalim,

      Good document, Thanks for sharing.

      Regards

      Sagar

      Author's profile photo Mohammed Kalim
      Mohammed Kalim
      Blog Post Author

      Thanks Vidya sagar

      Regards,

      Kalim

      Author's profile photo Former Member
      Former Member

      Hi Kalim,

      Good document.

      Regards,

      Saravana kumar Kattula

      Author's profile photo Mohammed Kalim
      Mohammed Kalim
      Blog Post Author

      Thanks Saravana

      Regards,

      kalim

      Author's profile photo Former Member
      Former Member

      Excellent doc Kalim....it explains 1099 reporting functionality in good amount of detail.

      Author's profile photo Mohammed Kalim
      Mohammed Kalim
      Blog Post Author

      Thanks Amir.

      Author's profile photo Lakshmi Sama
      Lakshmi Sama

      Hello Kalim,

      Good document on 1099 reporting functionality. But requesting you to avoid typo errors to increase the effective of the document. Thanks for sharing your knowledge and keep sharing.

      Thanks & Regards,

      Lakshmi S

      Author's profile photo Mohammed Kalim
      Mohammed Kalim
      Blog Post Author

      Hello Lakshmi,

      Can you give me one example so I can make document better in future?

      Regards,

      kalim

      Author's profile photo Lakshmi Sama
      Lakshmi Sama

      Hello Kalim,

      Please avoid typo errors in the above document. Pls chk this SS.

      1.JPG

      Thanks & Regards,

      Lakshmi S

      Author's profile photo Mohammed Kalim
      Mohammed Kalim
      Blog Post Author

      Thanks.

      Author's profile photo Former Member
      Former Member

      Hi Kalim

      Very good document. Thanks for sharing. Also dont forget to mask the important info on the screens.

      Regards

      Giri

      Author's profile photo Consultant Khan
      Consultant Khan

      Hi Kalim,

      This document will be the most liked document, by the user community if they are aware of this share, as most of the US clients have a mandatory requirement for reporting to IRS.

      Very useful reference and you can publish a second part for this document by focusing on different types of forms that can be used and also highlight on the Classic as well as extended with holding tax reporting for 1099s.

      Regards

      KIM Khan

      Author's profile photo Former Member
      Former Member

      Hi,

      It is nice one,

      Devendra

      Author's profile photo Prasanth Gopisetty
      Prasanth Gopisetty

      Hi Kalim,

      Good Explanation. We have recently updated the MISC form to reflect new version of the form in SAP by implementing note 1949022. Can you please let me know, how to update the Payer's information and Payer's Identification number in the form?

      Regards,

      Praisty

      Author's profile photo Piratla Siva Surya Karthikeya
      Piratla Siva Surya Karthikeya

      Hi Kalim,

      Thanks a ton for sharing a quick and needy insight, right from posting of invoices to generation of 1099 Form report.

      Could you also kindly share the configuration part of US-WHT, which is no where available online.

      Regards

      Karthikeya

      Author's profile photo Piratla Siva Surya Karthikeya
      Piratla Siva Surya Karthikeya

      Hi Kalim,

      I was actually looking for a document like this since long time, I am so glad that i could atleast get to know fundamentals for the report generation                                                                         .

      I appreciate for the work you have done on this part, keep going with helpful, needy and insightful documents like this.

      Regards

      Karthikeya

      Author's profile photo KAPIL MEHTA
      KAPIL MEHTA

      Hi Mohammed Kalim

      Thanks for sharing document. For 1099 reporting, Do you have details of field to be updated in vendor master using tcode BP in S4 HANA ? I am looking for information on what fields should be updated in BP to enable 1099 reporting.

      Regards

      Kapil