Now is the Time to Control Your 1099 Reporting with Microsoft Dynamics GP

This is your 1099 wake up call. Why are we looking at 1099's in August? It's because now the choice is being made for you. As part of the recently passed healthcare bill in the United States, essentially all vendors paid more than $600 in a year will need to be sent a 1099 form at year end, starting in 2012.

What do 1099's have to do with healthcare? Congress believes that greater documentation of payments will lead to increased tax revenues to help pay for universal healthcare. That assertion is still in question. What is not in question is that more 1099's will create more work for accounting departments.

For some time now I've argued that the best way to get control of the 1099 process is to prevent payment to vendors until their tax ID and other 1099 information is provided. In Microsoft Dynamics GP, the best way to control this is to place vendor on hold until the required information is received.

I've done it and others have successfully done it as well.  In fact, WilloWare includes the ability to automatically put all new vendors on hold as part of their Dynamics GP Power Pack. This also provides method for vendor setup approval but that is a whole different article.

It's now more critical than ever that 1099 reporting be correct. As part of the enforcement of the healthcare bill, the IRS has raised the fines for missing and incomplete information to $50 a form if it believes the problems were unintentional and the fines go up from there.  Many firms can't get their 1099 reporting right today with much more limited requirements. ...