1. 1099 Year-End Processing Guide
  2. Processing Preparation

Processing Preparation

To meet the deadlines that the IRS has imposed, 1099 processing requires the efforts of many employees in a company, and should begin several months before the end of the calendar year to allow ample time for researching and updating information.

This list contains some of the tasks for preparing for the 1099 processing. This list is not exhaustive, use it to promote a discussion among the employees who are responsible for preparing 1099s within your organization:

  • Decide which method or combination of methods you will use to process 1099 forms.

    You can use the A/P ledger method, the G/L method, or a combination of both. These methods are available in all of the releases that Oracle supports for 1099 processing.

  • Prepare internal records to go with the requirements of the method that you select.

  • For the A/P ledger method, you can set up category code 07 in user-defined code (UDC) table 01/07 to identify the different types of 1099 forms and the specific boxes to use on each form. Alternatively, you can use the 1099 flag to specify whether a voucher or voucher pay item is eligible for 1099 processing if only one type of return is to be produced for only one specific box on that return.

  • For the G/L method, you must set up AAI item PXxxxx to specify account number ranges for 1099 processing. These AAIs identify the different types of 1099 forms and the specific boxes on each.

  • Ensure that the address book information for 1099 suppliers is in a format that the IRS allows.

    The IRS requires that 1099 returns have only three address lines, including the mailing name of the supplier. The IRS permits four address lines if the 1099 return must have the legal name associated with the tax ID number as well as the name of the supplier.

  • Verify the value of the person/corporation code for each supplier. All suppliers that receive a 1099 form must have a code of either P (individual) or N (non-corporate entity).

  • Ensure that you have a tax identification number (TIN) for each supplier that is to receive a 1099 form. The IRS could impose penalties or fines for each missing or incorrect tax ID on 1099 returns that you submit.

  • Assemble IRS publications and forms for the current 1099 reporting year.

    Note: To understand which form to print, see Form Types