As tax season approaches, it's important to prepare for year-end. You may dread 1099 reporting, a time-consuming task for business owners and their accounting departments during tax season.
However, using Sage Intacct to manage your 1099 reporting and its e-file capabilities will help ensure the forms' accuracy and provide you with peace of mind as you file. Let's start by reviewing the steps you should take throughout the year to help streamline and prepare you for the filing process.
As new vendors or employees are added, be sure to create and set up a vendor type for 1099 contractors in the additional information tab for each 1099 vendor. When dealing with employees, you will set up 1099 information in the time and expense module, on the additional tab. Remember to ensure the employee's 1099 name is entered correctly. If you entered a 1099 name that differs from the Print as name, both fields will print on the 1099 form.
Create a 1099 vendor contact verification report. This report, created using the customer reports feature, will be very useful for comparing 1099 contact records to the primary contact record assigned or for validating that contact information is entered correctly. If you need help with how to create this report, please reach out to a member of the Tablespoon team for assistance.
Remove any duplicate 1099 vendors found. If you have created two vendor records for the same vendor, you will want to inactivate one and keep the other active. When you do this, remember to move any 1099-eligible payments to the vendor record you left marked as active.
IMPORTANT NOTE: Only submit one 1099 report for the vendor record you decide to keep. You must include any payments made to the duplicate vendor as Initial Open Values.
Remember to order new tax forms. These are updated yearly, so you will want to ensure you have ordered the latest forms for the upcoming tax season. You can find Sage Intacct-approved forms at intacct.dsa-direct.com. These are the only forms Sage will support, as they have been set up to print perfectly.
If this is your first 1099 season using Sage Intacct Core Financials, ensure all historical year-to-date amounts have been captured for each 1099 vendor or employee. Opening balances, or historical year-to-date (YTD) amounts, are the 1099 amounts you had in your last system before you started tracking in Sage Intacct. If you set up your books with a start date after January 1, you probably need to set up starting YTD balances for each 1099 vendor or employee. This amount is added to the total of existing transactions tagged for 1099 treatment and is included in the 1099 reportable totals.
IMPORTANT NOTE: You will need to know whether you will enter opening balances at the top level or at the entity level. This will be decided based on whether your company is enabled to issue a separate 1099 per entity:
If this option is selected, you can enter historical YTD amounts at either the top level or entity level. Vendors and employees within entities are assigned entity-specific initial amounts.
If you are not configured to issue a separate 1099 for each entity, enter the initial amounts for all vendor employees at the top level.
Only enter the calendar YTD 1099 balance for a vendor or employee. This amount can differ from the year-to-date total if your company uses a fiscal year that doesn't align with the calendar year; back out payments made to that vendor or employee during the prior calendar year. In addition, some of a vendor's transactions may not have been 1099 entries. Should you have any of these, the 1099 box will be unchecked for those entries.
1099 opening balances can be entered in one of two ways: manually or by importing them using Sage Intacct's 1099 import templates.
Following the above steps will help ensure you are ready for the upcoming 1099 reporting season each year. You can use Sage Intacct to run customized reports throughout the year, highlighting 1099 accounts and helping ensure the correct 1099 form type and other data are accurate and ready for printing and submission to the IRS before the start of the hectic tax season.
As you begin processing the 1099 forms for your organization, you will also prepare copies to be sent to the IRS. If your organization works with fewer than 250 vendors who require 1099 forms, the IRS guidelines allow your organization to mail these forms to the IRS. You can print the forms directly from within Sage Intacct.
The Taxpayer First Act of 2019, enacted July 1, 2019, authorized the Department of the Treasury and the IRS to issue regulations that reduced the 250-return requirement for 2023 tax returns. The e-file threshold of 10 applies to returns required to be filed on or after January 1, 2026.
How to edit entity information:
As in our 1099 blog last year, beginning in 2024, for information returns filed for tax year 2023, including Forms 1099-MISC and 1099-NEC, employers had to file electronically if they filed at least ten information returns in a year. It's not 10 of a specific form; it's a combination of all the information returns filed under an Employer Identification Number. So, if you have Forms W-2, Forms 1099-MISC, 1099-NEC, 1099-R, or any other information returns that an employer may be filing, and if you have over ten combined returns, you will have to file electronically. Sage Intacct allows you to prepare and send the e-file batch directly from Sage Intacct to TaxBandits to submit the forms to the IRS. There will be an additional per-form charge from TaxBandits.
The IRS will begin accepting 1099 e-filing transmissions for the 2025 tax year on January 31, 2026. If you want to learn more about managing your company's reporting or about setting up and using e-filing, schedule a call with one of our Tablespoon experts.