Tax Reporting Entities

Tax Reporting Entities

In the United States we must report to the Internal Revenue Service certain type of payments we make to 1099 reportable suppliers. During the supplier setup We can make supplier as federally reportable. When we enter invoices for that supplier, we classify invoice distributions by 1099 misc type using the Income Tax type field. At the year end, we can then report, in standard formats of accumulated 1099 payment information to the Internal Revenue Service, other tax agencies and to our suppliers.
For each reporting entity, we assign one or more balancing segment values, when we submit 1099 reports for a tax entity, Payable sums up the paid invoice distributions that have these balancing segment values in their accounts (Eg- Company, Fund balancing segments)to create and report on 1099 supplier payments.


If we want to use combined federal and state 1099 filing, and want to produce K-Records and B-Records, we have to enable the combined filing program in payables option.
If we use combined federal and state filing, then we have define tax regions.
Define tax reporting entities.

Resolve 1099 exceptions if any:
Submit for each reporting entity the 1099 Invoice exception report to identify the following exceptions :
A )1099 Invoice distribution with no income tax type.
B) 1099 Invoice distributions with invalid or missing income tax region.

Submit the 1099 supplier exception report to identify and resolve the exceptions:

A) Suppliers with Null or Invalid State abbreviations.
B) Suppliers that will be flagged as foreign in the 1099.

Resolve any exceptions in the Suppliers window.
A)Optionally withhold tax from suppliers if they have a missing or invalid Tax Identification Number (TIN) and if you have not met the legal requirements of requesting a valid TIN from them.
Generate 1099 Reports.
A)1099 Forms. Submit to the Internal Revenue Service for each 1099 supplier, and send a copy to the supplier.
B)1096 Form. Submit to the Internal Revenue Service for each 1099 MISC type paid during the calendar year.
C)1099 Electronic Media. If you submit 250 or more 1099 forms, the Internal Revenue Service requires you to file your 1099 payment information on magnetic media or electronically .
D)Form 941. Send this form to the Internal Revenue Service to report total supplier withholding for a quarter. Your Accounts Payable department should create a manual payment for the total amount withheld, and you should remit this amount and the 1096 Form to the Internal Revenue Service.
E)1099 Payments Report. Run this report for your reference to review 1099 payments by supplier or MISC type