Preparing 1099 forms in SAP Business ByDesign
Use these six simple steps to save yourself time and tears!
By: Teresa Blackwell, Director, SAP Business ByDesign Practice & Jay M. Winchester, Proposal Writer
January always comes quickly, and with it comes time once again to send out 1099 forms to vendors while you fill out and submit the 1096 form to the IRS. Honestly, it’s a time-consuming hassle. Finding a simpler means of completing this important task happen is a great way to start the new year.
Fortunately, SAP Business ByDesign handles these tasks with a minimum of effort. In just a few quick steps, ByDesign processes and prints your 1099s while it also processes and creates your 1096 file for submission to the IRS. Here’s how it works:
Step 1: Review the Withholding Tax reported
Go to Tax Management Work Center> Reports. Find the report Withholding Tax Items. Run the report to see the amounts reported by Supplier and Income Type (non-employee compensation, rents, etc.). NOTE: If there is no data is in this report, there may be an issue with the setup of the tax authority. Contact your implementation partner for assistance. Review your data. If the withholding tax is calculated correctly, proceed to Step 2. If an incorrect amount is reported to a vendor, make corrections by going to Tax Management Work Center>Manual Tax Entries>Withholding Tax Base Amount Entries. Select the New button and an entry screen opens. Make the adjustment and release.
Step 2: Prepare 1099 Forms
Go to Tax Management work center>Periodic Tasks> Withholding Tax Return Runs. Select New>Tax Return Run. The screen opens. Enter a description (for example, enter 2017 Almika 1099 Forms). Enter the Tax Return Arrangement ID. This should be the tax return arrangement for the tax return type, Miscellaneous Income (1099 Misc) – Form B. Enter the appropriate Dates. Save your entries, set it to Active and then Schedule. When the return runs, a message displays: Tax return run XX created successfully.
Step 3: Review the 1099 forms
Go to Tax Management Work Center>Tax Returns> Withholding Tax Returns. The tax return appears with a status of In Preparation. Use the Preview button to view the 1099 forms. If the forms are correct, enter Release and Print. The status of the return changes to Reported.
Step 4: Prepare the 1096 File
Go to Tax Management Work Center>Periodic Tasks> Withholding Tax Return Runs. Select New>Tax Return Run. The screen opens. Enter a description, something like 2017 Almika 1099File. Enter the Tax Return Arrangement ID. This should be the tax return arrangement for tax return type, Miscellaneous Income (1099 Misc) – File. Enter the appropriate Dates. Save. Set to Active. Schedule.
The system creates a tax return file. Go to Tax Management work center>Tax Returns> Withholding Tax Returns. The tax return is visible with a status of In Preparation. Use the View button to view the 1096 file. The Transmitter Control Code (TCC) is a required field so be sure to request the code from the IRS (see Step 5 below).
Step 5: Request the TCC
Warning! Your Transmitter Control Code (TCC) is on FIRE! No, really…it is. Your TCC is on the IRS’s FIRE website. FIRE stands for File Information Returns Electronically. Go to the FIRE website and retrieve your TCC, using IRS Form 4419. It takes 45 days from the time you submit the request to get your TCC. If you use your TCC to file each year, it remains in effect, which means you don’t have to re-submit to retrieve it each year.
Step 6: Upload the 1096 File to the IRS website
Enter the TCC and release your tax return. The file is created and ready for uploading to the IRS website.
Uncertain about filing electronically? Don’t be. Test your electronic file at the IRS FIRE site. When you get the pass function file, you’re clear to send your actual file to the IRS FIRE site.
Using SAP Business ByDesign and following these few simple steps saves you time when it comes to preparing your 1099s and 1096. It’s just one more way ByDesign benefits smart organizations. That’s our opinion. What’s yours?
Find out more about how SAP’s Business ByDesign can help your organization be more effective and efficient by getting in touch with us. Send us a message today. Click here.