1099-MISC

IRS Information Reporting

Introduction

• Steps the Wing Should Take• 1099-MISC

– Prizes and Awards– Rent and Royalty Payments– Services– Attorney Payments

• Final Notes• Questions

Steps the Wing Should Take

• Be diligent with Accounts Payable postings. The first step is having correct information.– Have only one vendor card for each vendor.

• Your WFA can merge vendor cards if more than one card exists for a vendor.

– Verify that transactions posted are accurate.– Indicate 1099 Eligible Vendors in

QuickBooks• This can be done by editing the vendor and

checking the 1099 option under the “Additional Info” tab.

• Add the vendor Taxpayer ID information to QuickBooks

Vendor Edit Screen

Check this box if

vendor is eligible for

1099 reporting

Enter vendor Tax ID

from W9 here

Steps the Wing Should Take

• Decide which vendors should receive a 1099-MISC– Obtain Form W-9 from vendors

• The Form W-9 can be used as a tool to obtain the necessary information from vendors. It will also help determine if payments to vendors are reportable.

• A Form W-9 should be obtained from all vendors and kept on file at wing headquarters.

W-9 Example

Vendor should enter one TIN number. This

number should match their annual tax returns.

Vendor should

choose one business

type.

Steps the Wing Should Take

• Determine the amount to be reported on each 1099-MISC

• Provide all information needed to file your 1099-MISC Forms to your WFA. A spreadsheet will be provided that will aid in consolidating the information.– All information should be provided no

later than Jan 15th for the preceding calendar year.

– NHQ will file all 1099-MISC Forms to the IRS, state tax authority, and recipients

1099-MISC

• Required for the following– Prizes and Awards – Rent and Royalty Payments – Services performed by individuals

who are not employees and are not incorporated

– Gross Proceeds paid to Attorneys

1099-MISC Example

Civil Air Patrol

105 South Hansell Street

Maxwell AFB AL 36112

334-953-7748

All of the information for the recipient must match their annual income tax return

Prizes and Awards

• Reportable amount:– $600 per calendar year

• Information needed:– Individual’s name and address– Individual’s Social Security Number– Total amount of all prizes and awards paid to

the individual during the year

• Example:– Flight scholarships or any other cash awards to

members• Scholarships are considered awards unless paid to a

candidate to attend an educational institution for a degree

Rent and Royalty Payments

• Payments made to corporations and governments are not required to be reported

• Reportable amount:– $600 per calendar year for Rent – $10 per calendar year for Royalties

• Information needed:– Name and address that the vendor uses to file

their annual tax return– Taxpayer Identification Number that the

vendor uses to file their annual tax return– Total amount of all rent or royalty payments

paid to the vendor during the year.• Example:

– Hangar rental, office rental, or storage rental

Services

• Payments made to corporations are not required to be reported.

• Reportable amount:– $600 per calendar year

• Information needed:– Name and address that the vendor uses to file

their annual tax return– Taxpayer Identification Number that the vendor

uses to file their annual tax return– Total amount of all payments made for services

to the vendor during the year.• Example:

– Catering, facility cleaning, lawn care, or pest control

Attorney Payments

• Payments made to corporations must still be reported.

• Reportable amount:• Reportable for any amount paid per calendar

year• Information needed:

• Name and address that the vendor uses to file their annual tax return

• Taxpayer Identification Number that the vendor uses to file their annual tax return

• Total amount of all payments made for services to the vendor during the year

• Example:• Retainers and legal fees paid to law firms

Some Final Notes

• All forms must be filed with the same information as the individual or business uses to file their income taxes each year– Sole Proprietorships should be sent in the

individual’s name, not the business name– Forms sent to individuals should contain their

social security number, not an employer identification number.

• All information should be reported by calendar year, not fiscal year

• The Wing is responsible for obtaining all information via Form W-9.– The IRS penalizes $50 per form for incorrect

information filed on 1099 Forms that are not supported by a W-9.

If You Get Stuck or Need Help

• Contact your Wing Financial Analyst or Financial Management at National Headquarters!

Questions?