1099 Reporting.ppt

1099 Reporting And other related issues What is the purpose of this training? To enable University of Arizona employees To understand why we are required to obtain tax information for 1099 reporting. To identify 1099 reportable payments. To obtain Tax Identification Numbers for reportable payments. To setup vendor numbers in a manner that will comply with IRS requirements. Agenda What does the law say Who is 1099 reportable What information do we need to obtain from them How do we document W9 information How do we code vendors for 1099 status How do we code vouchers for 1099 status What payments are not 1099 reportable How does the IRS check TINs How should Vendor Numbers be setup What does the law say? The Federal law requires that The University of Arizona report payments for services, fees, etc. to the IRS using Form 1099. In order to do this the university needs a Federal Taxpayer Identification Number for each vendor. If a vendor fails to provide a TIN for a reportable payment, the university should not set up contracts with them or, if the service has already been performed, must withhold 28% from their payment. Who should provide a TIN? Section 6109 of the Internal Revenue Code requires a vendor who receives a payment to give their correct TIN to persons who must file information returns with the IRS. The vendor must provide their TIN, when it is requested by the university, whether or not they are required to file a tax return or whether or not the payment is reportable. What do we need to obtain? A TIN A TIN (Federal Tax Identification Number) can be either: A SSN (Social Security Number if an individual) An EIN (Employer Identification Number) which can be used by both organizations and individual. If the vendor is an individual you need to ask: Whether they are a US citizen irregardless of where they live. If they are not a US citizen you need to contact FSO-Operations as there are other tax issues that need to be addressed. Are you an employee