Smart 1099 Procedures User’s Guide smart: Product of Computer Services Board of Education




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SMART 1099 Procedures

User’s Guide

SMART: Product of Computer Services


Board of Education

James S. Beri • Kenneth E. Berlinn • Mary E. Blackmon • Lynda S. Jackson • James Petrie • Christopher A. Wigent, Superintendent

Table of Contents


1099 Procedures Overview 2

Become an Authorized User of the 1099 Module 3

Bring up the 1099 Module 4

List Screen Will Be Displayed 5

Review Setup information 6

Correct all the errors 7

Look at the detail on the 1099 vendors 7

Look at the detail on the MSC vendors 7

Adjusting a Vendor 1099 Record 10

Run a Vendor List 11

Run a Purchased Services List 11

Create 1099’s 11

Verify the 1099 information 12

Print the 1099’s 13

When done, sign the last page of the Verify Report 13

Keep copies of the Reports 14

The files are sent electronically by Wayne RESA 14

Reports 15

Purchase Service Report 16

Vendor List by Number 16

Vendor List by Name 17

Detail 1099 18

Verify Totals 18

Print 1099 19

MSC Vendor List 20

Print 1099 – Masked Tax ID 20




1099 Procedures Overview


The SMART 1099 Procedures takes you through the entire process of meeting the IRS and State of Michigan 1099 reporting. It begins with the selection and validation of vendors, includes the printing of 1099’s and ends with the reporting of 1099 information to both the IRS and the State of Michigan.
It does not include tax information reporting to Michigan cities. You can obtain a list of Michigan cities that require tax reporting by going to the State of Michigan web site:
http://www.michigan.gov/taxes/0,1607,7-238-43531-154446--,00.html#1

The steps to completing the 1099 procedure are as follows:




  • Become an authorized user of the 1099 Module

  • Sign-on to the 1099 Module

  • Review setup information

  • Correct all the errors on vendor records

  • Run a Detail 1099 Report to check for items that may need adjusting (such as mileage or a supply reimbursement) from a 1099

  • Look at the detail on the MSC vendors and make new vendors as needed

  • Adjusting vendor amounts and 1099 box #’s as needed

  • Run a Vendor List and check for vendors that should get 1099

  • Run a Purchased Service by Vendor Report to check for missed vendors

  • Create 1099’s

  • Verify the 1099 information

  • Print the 1099’s

  • Sign the last page of the Verify Report

  • Keep copies of the Reports

  • The files are sent electronically by Wayne RESA to the IRS and State of Michigan



Become an Authorized User of the 1099 Module

Make sure you have access to the SMART 1099 Module. Starting from the main SMART screen, go to “View”, and select “Security” to gain access to the Security Module. Select the person who will be processing 1099’s and select “Authorized” next to the AP1099 Module to get access to this module.


You may need to make changes to the vendors to complete the 1099 process, so someone needs access to the Vendor Module with the both the “update” and “tax ID” permissions.
If you are not the Security Administrator, have that person give you access to the 1099 Module.




Bring up the 1099 Module


Bring up the 1099 Module from SMART by selecting “Finance” and then “AP1099.” You will be prompted for an update the first time in the program this year.




List Screen Will Be Displayed


You will come up in the List Screen. All vendors that have a S or an E tax type are included on this screen even if they do not meet the $600 rule. All MSC vendors are also listed. Vendors with errors are highlighted in pink and the error is listed next to its 1099 total.

The list screen has options to filter which AP1099 records are viewed.

The default is all vendors. You can choose to just view the error records

by clicking Show Error Vendors Only. You can also include/exclude the

MSC vendors and the under $600 by using those views.

Review Setup information


Select “View” then “District Setup” from the List Screen to display the setup screen. Make sure all information is correct. This information will print on each of your 1099’s.


The district information should be entered in all CAPS. The tax id should be entered as nine numbers with no dashes. The District Locked field is a view only field to let you know if RESA has locked your 1099 files. After entering the required (pink) information, click the ok button to return to the list screen.

Correct all the errors


Begin by correcting all the errors that are highlighted in pink. Most of the errors require you to go to Vendor Maintenance to fix them. You can view just the errors by clicking on that view.


Look at the detail on the 1099 vendors


Run a Detail 1099 Report, either by Vendor Number or Vendor Name, and look for items that may need adjusting on the 1099’s such as mileage or a supply reimbursement.

Look at the detail on the MSC vendors


Look at the detail on the MSC vendors to determine whether you have paid a vendor more than $600. If so, a proper vendor should be set up for that vendor and an adjustment made to the new vendor 1099 record to move the money over to that vendor. The MSC vendors will continue to show on the screen, but 1099’s will not be issued to any of them.
Use the MSC Vendor List report to determine which vendors had $600 or more. This report is sorted by the name on the Misc. vendor check so that a person with checks from more than one misc vendor will have a total by the person’s name.
Example of MSC Vendor List

Detail Screen on a MSC vendor is depicted below. No adjustments or box changes can be done on a MSC vendor because an actual vendor should be setup for those that require a 1099.




Adjusting a Vendor 1099 Record


Adjustments should be made to move MSC vendor amounts or to adjust 1099 information for other reasons. In this example, mileage needs to be deducted from the 1099 by using the Adjustment Amount field on the detail of the 1099 record. Use a – minus sign in front of the number to deduct the amount and no sign in front of the number for an addition. Also enter an Adjustment Reason.
The default box number is 7. However the box number should be changed if the vendor was paid for Rents (Box 1), Royalties (Box 2), Income paid through payroll (Box 3), Medical Payments (Box 6), Attorney Settlements (Box 14) but not normal Attorney payments. Also Box 15A and Box 15B are related to Section 409A Deferrals (Box 15A) and Income (Box 15B). Just click in the appropriate Box number where you want the income to be shown.
You can use the Detail 1099 Report as an aid. Also the Detail Screen on a 1099 Record lists the payment information.

Adjustment amount

Adjustment Reason


Run a Vendor List


Run a vendor list in AP1099 by accessing View, Reports, Vendor

List. Determine if any vendors should be receiving a 1099 that are not listed in SMART AP1099. Enter their tax id and tax type (S or E) in SMART Vendor Maintenance so they show up on the 1099 screen. This can be run by Vendor number or Vendor Name. The report will use the settings chosen on the list screen, i.e. include under $600.



Run a Purchased Services List


Run a Purchased Services List by accessing View, Reports, Purchased Services List. This report will show vendors paid using object codes starting with 3*** or 4*** that will currently not get a 1099 because they have an X or nothing in the tax type code. These vendors should be checked if they are Incorporated. If not, they should receive a 1099. In order for them to receive a 1099 enter their tax id and tax type (S or E) in SMART Vendor Maintenance.

Create 1099’s


When all errors have been cleared, adjustments made and box maintenance (medical, attorney, etc) done, you can create the 1099’s by accessing “Actions,” “Create 1099’s.”


1099’s will be created for all vendors that have tax id’s with a vendor tax status of S or E that do not have errors and have been paid over $600. No 1099’s will be created for MSC vendors or vendors paid under $600 (unless you have overridden this rule for a specific vendor on the detail tab).

Verify the 1099 information


Verify the 1099 information that will print by Accessing View, Reports, Verify Totals. You can print this report also by Vendor Name or Vendor Number. Hit the printer icon when the report comes up on the screen. If changes need to be made to the Vendor Information, it should be done in Vendor Maintenance. If payment information is wrong it should be changed with an adjustment in the AP1099 Module.
You must Create 1099s again after any changes are made in order for the correct information to show up on the Verify Report or to print the 1099’s.

Print the 1099’s


When your data is correct and the 1099’s can be printed choose View, Reports, Print 1099. The actual 1099s will appear on the screen and you will choose the printer off the toolbar. A dialog box will appear and you can choose just one copy by changing the print range to pages and change the pages from 1 to 1 to get one test form. Load the forms as you would laser checks. Notify all users that special forms are printing or turn off the regular print queue, whichever is appropriate.

You should print at least one form on plain white paper to check to see if the alignment of your forms is correct. Remember there are three copies of the 1099’s. So if you choose to use all three, you will be doing this step three times – each time loading the printer with the appropriate forms – 1099 Form A, B and C. For forms B and C you may want to print the 1099’s with a Masked 1099. This report option is on the View, Reports, Print 1099 Masked 1099.




When done, sign the last page of the Verify Report


When done, sign the last page of the Verify Report that includes the totals by box and fax it to Wayne RESA so that the 1099 files can be sent electronically to the IRS and to the State of Michigan. The fax # is 734-334-1299.

Keep copies of the Reports


Keep copies of the Verify Report, Detail 1099 Report and a copy of your 1099’s for your records. In order to get this information in an electronic file access File, Export from the list screen and give the file a name and destination. This is a download of your list screen information that includes the total invoices and any adjustments that were made and the reason. This can be printed for your file also if necessary from Excel.
After Wayne RESA receives your fax; your AP1099 files will be locked. If you find you need to make an adjustment before they have been taped, call Wayne RESA to have your files unlocked. You can then make your changes and Create 1099’s again to make a new file. You will need to fax a new sheet to Wayne RESA with the corrected totals. If your files have already been taped and sent to the IRS, you can request a form 1096. A corrected 1099 copy must be mailed to the IRS and to the State of Michigan using the 1096 form as your transmittal. This is the district’s responsibility.

The files are sent electronically by Wayne RESA


The files are sent electronically by Wayne RESA to the IRS and to the State of Michigan. Copy A can be kept in your office as the file copy. Copies B and C should be mailed to the recipient in the window envelopes provided. The district is responsible for mailing a copy to the local taxing authorities. A list of these is provided on the RESA website.

Reports


The 1099 Module reports are summarized here for your information. To access reports, select “View” from the menu then “Reports.”


The 1099 reports are:





  • Purchase Services By Vendor

  • Vendor List by Vendor Number *

  • Vendor List by Vendor Name *

  • Detail 1099 By Vendor Number *

  • Detail 1099 By Vendor Name *

  • Verify Totals By Vendor Number

  • Verify Totals By Vendor Name

  • Print 1099

  • MSC Vendor List

  • Print 1099-Masked TIN

* These reports print based on what records are chosen on the 1099 list screen; include MSC vendor or vendors only over $600.00. The error vendors do not affect these reports.


Purchase Service Report


This report lists vendors that have items charged to objects beginning with 3 or 4, but will currently not get a 1099 because they have no tax id entered or an X as the tax id type. This list should be checked carefully for vendors that may have been missed.



Vendor List by Number


This reports list all vendors in numeric sequence by vendor number. All vendors are listed on this report regardless of their 1099 status. These reports use the statuses chosen on the list screen, i.e. if the include under $600 vendors check mark is off, you will only get those vendors who were paid over $600.


Vendor List by Name


This report lists all vendors in alphabetic sequence by vendor name. All vendors are listed on this report regardless of their 1099 status.


Detail 1099


This report has a heading of “List of Potential 1099 Vendors.” The report will include “Misc. Vendors” and /or “under $600 vendors” if you select these filters on the list screen. Look for adjustments that may be need on 1099’s

Verify Totals


This is the Verify report. Once it is correct, sign the last page and fax it to (734) 334-1299.


Print 1099


These are the actual 1099’s that are mailed to your vendors.


MSC Vendor List


This is a report of MSC Vendor sorted by the name printed on the check. All vendors with the same name will print together with a single total no matter what MSC Vendor was used to print the check.


Print 1099 – Masked Tax ID


This report is the actual print of the 1099’s on the form with the recipients tax id masked so that only the last four numbers show. This form can be used for the copies that are mailed to the recipient.



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