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                                                       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

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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.


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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.

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Save the Screen.


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Display Posted Document.

Transaction Code: FB03



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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


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Click on “Process Open Items” Tab.


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Simulate and Save the Screen.


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Execute Withholding Tax Report for 1099.

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


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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).



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Click on Line item Icon.

Generic 1099 Reprot (S_P00_07000134)

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Execute.

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Enter.

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

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16 Comments

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  1. Lakshmi Kumari 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

    (0) 
  2. 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

    (0) 
  3. 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

    (0) 
  4. 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

    (0) 
  5. 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

    (0) 

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