1099 Processing
Does the Receives a 1099 check box on the Tax tab of the Vendor Master screen do anything except control the default of the Flag for 1099 check boxe on the voucher and Misc voucher screens?
Does the the Flag for 1099 check box on the Voucher and Misc Voucher screens actually falg any specific data in any table to indicate that the amount of that specific voucher needs to considered 1099 reportable for that vendor?
I believe the answer to the first question is No. It only controls the default on the voucher screens.
If the answer to the second question is Yes, then exactly where is that stored in the data base? I have been unable to find it, but that certainly doesn't mean it is not there somewhere.
I have just downloaded the 1099 package that is available on the web site for free. It is my understanding that this package was created by xTuple.
Looking at this package is what prompted my questions. This report seems to simply calculate a total from checks to a vendor that is currently flagged to Receive a 1099 for a user selected check date range. What if a vendor hasn't always required a 1099, but does now? Well, I guess if you knew when that changed you could print for just that vendor and use a date range. By the way, I consider the date range logic flawed because the query looks for checks with a date earlier than the begin date and later than the end date, when it should be earlier than or equal to the begin date and later than or equal to the end date whic is, I believe the logic used throughout the system. Easily changed in the script, or if the user is aware the dates enetered can be adjusted. In other words to include checks printed for an entire year of 2009, the begin date would have to be 12-31-2008 and the end date 01-01-2010.
A more serious flaw, in my opinion, is what if some invoices from a vendor are to be considered 1099 reportable and others are not. From question two above the system implies that to be supported and may be it is if that individual voucher is recorded as requiring a 1099 that I have been unable to find. Clearly, the current package on xChange will not differentiate these if they were paid on the same check.
Further research has revealed that the answer to my second question is in fact yes and there is a boolean field in the voucher table (vohead) that indictes whether this is a 1099 voucher.
It then appears that when a check is created the checkitem table has the voucher information that is being paid there is a link back to the voucher number (not the voucher id) from the check item.
It seems to me that the query for the 1099 report should be based on check items where the checkhead record for the item is within the date range and the voucher that was paid with the check item was flagged as a 1099 voucher.
This query could be for one vendor or all vendors without regard to the present setting for a vendor's receives a 1099 check box.
In addition to the formatted output that fits a pre printed 1099 form, I believe an additional report should be added that would provide the detail check items and vouchers that were used to calculate the amount paid would be helpful for doumentation to vendors if requested and as a data source for those people that create the actual 1099 by hand.
I would appreciate comments from xTuple staff as to the accuracy of this further research.
I haven't thought about the impact, if any, of credit memos, adjustments, corrections, etc.
I believe we owe it to our vendors and suppliers to calculate and report this information accurately.
As I continue to research I realize that creating a Misc Check actually doesn't create a checkitem record and would not get included in my suggested query. It would get included in the current query but doesn't allow for a vendor's 1099 status changing during the year as I previously noted.
Larry,
Thank you for your research and feedback on the 1099 report. I think the method we offered would work in most cases, but you are right that it would provide inaccurate data if all checks to the vendor in the period were not 1099 payments.
Any chance you could work your suggestions into a fix or patch to the report and contribute it back?
BC
Yes, I will try to do that. Any comment about the date range?
You are completely right about the date issue. That should have been 'greater than or equal to", as you said. It was a mistake on my part. Please feel free to make that update as well.
Thank you!
I have just returned from a client's site, Hunt Engine, where we installed the 1099 package the notes here in this forum. I looked at a 1099 reporting form which I hadn't really looked at in years. There are actually 13 possible boxes for reporting various kinds of 1099 values.
In all systems development we constantly look for simplicity and usefullness to our customers. While agreeing with my thoughts about 1099 checks and non 1099 checks in theory, Mr. John Biggs, the CFO at Hunt, was of the opinion that those cases would be rare and BC's calculation of all the checks printed during a date range for vendors whose master record is checked as requiring a 1099 is most likely good enough for most people. I have talked to two other controller friends of mine and they also agree with Mr. Biggs. So, it seems there is really no need to make any changes to the calculation method as it exists in the package.
Just for grins Mr. Biggs and I looked back at the Solomon Accounting product he was using before xTuple and Solomon has some very elaborate 1099 functionality where totals of any one of the 13 boxes are maintained and printed in all the various boxes as necessary along with a report listing all the various boxes and amounts. Neither Mr. Biggs nor I believe that is something that deserves xTuple programming and development time and expense. Since this only applies to the United States it only makes sense to keep it as simple as possible that works for most companies.
However, we did discover a shortcoming of the 1099 process that I had overlooked because I had not looked closely enough at the actual printing of the 1099 form. The taxpayer's ID is not printed on the form. In the case of individuals this would be their SSN and in the cases where perhaps some LLC, partnership or other entity was requiring a 1099 it would be the vendor's Federal Tax ID. Thsi information absolutely must be added manually to any form after printing in order to use it. I then discovered that we really don't have a data base field in the vendor master record to put an SSN or Federal Tax ID that could be used by the Report Writer.
Any thoughts BC?
Larry
BC:
Near the top of the Vendor Master screen just below the Name field there is another field with the caption Number:.What is this field generally used for? The demo database has this field populated with some numbers that I can't seem to figure out what they represent. When I looked at the Help system and the Product guides on this site the section about Vendors, 1.8 under Accounting, the vendor list is shown, but there is no information or guidance about creating the Vendor Master Record that I could find.
Could this field possibly be used for an IRS Tax ID field?
Larry
I'm actually using this field for this purpose, if a vendor is solo proprietary than I'm using it in SSN format : XXX-XX-XXXX
If a vendor is LLC or INC I'm using it in Fed's tax ID format : XX-XXXXXXX
If a vendor supplier of goods than this field to record our account number with this supplier.
Beancounter:
Thanks. That seems like very good idea.
Have you tried the 1099 reporting package available on the xChange that caused me to start start this thread?
Larry
Larry,
As Beancounter suggests, my presumption is that the Vendor Number field will be used to store the TID for the Vendor. If there is data in that field, it should be printing into the proper box on the 1099 form.
BC
Hi--
I've looked at the report definition, too, and the 'detail' query doesn't seem to pull that value (vendinfo.vend_accntnum) and the report definition itself defines empty space in that field. I've got a client asking about this and while the change is trivial, I don't want to do a fix if the package has been updated all ready.
Thanks,
Steve
Hi BC:
I think that is fine and should work OK. That fact should probably included in the notes you put together about the reporting process. I don't see that field in the report query, but maybe I have missed it. Should be easy enough to add if necessary.
By the way, thanks to you for getting this 1099 reporting process started.
Steve, please go ahead and make that update. I'll post your changes on the xChange as well, when you're done.
I have incorporated changes submitted by Steve and added a few updates of my own to the Print1099Forms (http://www.xtuple.com/xchange/product/print-1099-form) package on the xChange. If you have already gone through the checkout process, you can go to your My Account | Files page and download it again to pick up the updated version. Thank you to all who contributed suggestions and code! This has been a great process.
BC