Guidelines for Reporting Limit Methods for Income Tax Regions

The reporting limit is the minimum amount used to determine whether to report on payments to a supplier. If you're doing business within the United States (US), refer to federal or state tax publications for information on US 1099 reporting requirements.

Select from one the following methods to compare payments to the reporting limit amount:

• Same as federal

• Compare individually

• Compare sum

Note: If you don't specify a reporting limit, the limit is assumed to be zero.

Same as Federal

This setting uses the federal reporting limit, which is predefined in the application as 600 USD.

Compare Individually

This setting compares the reporting limit to the sum of the payments for each US 1099 miscellaneous income tax type.

For example, the reporting limit for region X is 600 USD. You make two 400 USD payments to a supplier in region X and classify each payment with a different US 1099 miscellaneous type. The supplier isn't reported to the region tax authority because the total for each tax type is less than the reporting limit of 600 USD. In this case, the supplier is reported only to the federal tax authorities.

Compare Sum

This setting compares the reporting limit to the sum of the payments for all US 1099 miscellaneous income tax types.

For example, the reporting limit for region X is 600 USD. You make two 400 USD payments to a supplier and classify each payment with a different 1099 miscellaneous income tax type. The supplier is reported to the region tax authority because the sum of the payments, which is 800 USD, exceeds the reporting limit. In this case, the supplier is reported to both federal and region tax authorities.