How do I manage 1099 reporting in Design Manager?
Design Manager offers tools for generating and customizing 1099 reports to comply with tax regulations. This article provides an overview of 1099 reporting in Design Manager, steps for generating reports, and explanations for unique scenarios like credit card payments or adjustments to vendor totals.
Overview of 1099 Reporting
Design Manager supports the generation of 1099-NEC reports, which include payments made via checks or ACH that qualify for 1099 reporting. Payments made by credit card or through third-party platforms are excluded, as they are reported separately on 1099-K forms by the payment processor. Correctly categorizing vendor payments ensures accurate reporting.
Generating and Obtaining 1099 Reports
To generate a 1099 report in Design Manager:
Verify that vendor payments have been categorized appropriately, ensuring only qualifying payments (checks, ACH) appear on the report.
Navigate to the Vendors section within Design Manager by going to projects in the left hand navigation bar and selecting "vendors" from the list.
Select the 1099 E-File Button in the top right corner of the vendors window and choose the relevant tax year, minimum payment amount and 1099 type.
Review the file and confirm details before printing.
Payments made via credit cards or third-party platforms will not appear in the 1099 reports, as these are reported via 1099-K by the processor.
Adjusting Vendor 1099 Totals
In cases where adjustments are needed for accurate tax reporting, such as excluding owner-routed payments:
Create a New Vendor Record for Excluded Payments: - Example: "[Vendor Name] – Owners."
Enter Two Offsetting Expense Bills for the Tax Year: - For the original vendor, create a negative expense bill reflecting the amount to exclude (e.g., −$100,000), posted to a common suspense account. - For the new vendor, create a positive expense bill for the same amount, also posted to the same suspense account.
Create fake payments against the Bills in the Payments & Checks Window: - tag each payment and issue a fake payment against each vendor bill using either a hand check or wire payment.
This will reduce the original vendor’s 1099 reporting total while correctly allocating the excluded amount to the new vendor record. Please ensure that the dates and fiscals match and are showing in the year that you need to file the 1099 for this vendor.
Frequently Asked Questions
Why doesn’t my vendor, paid by credit card, appear on the 1099 report?
Payments processed via credit cards or third-party platforms are reported to the vendor on a 1099-K by the payment processor. Only direct payments like checks or ACH are included on the 1099-NEC generated within Design Manager.
By following these steps and understanding the distinctions between payment types, you can manage 1099 reporting efficiently in Design Manager.