Dynamics 365 Business Central 2024 Wave 1: E-file IRS 1099 forms without Integration-Part 1

Hi Folks,

For businesses in the United States, managing tax compliance is an essential part of accounting and finance. One of the key forms used to report income paid to independent contractors and vendors is the IRS 1099 form.

The Internal Revenue Service (IRS) requires one or more version of the 1099 tax form for payments to vendors. Copies of these forms must be sent to vendors on or before the last day of January every year.

On your purchase documents, specify that the document is 1099 liable and the 1099 code for the vendor.

Important: From version 24.0, you can start using the 1099 functionality for better transparency, integration, and automation. To do this, you must enable this feature using the Feature Management page. If you don’t enable it, Business Central automatically enables it with the version 27.0.

Types of IRS Forms:

There are several types of 1099 Tax Forms, each corresponding to a specific type of income. Business Central supports the following 1099 Tax Form types:

The 1099-MISC form is used by businesses to report payments made to independent contractors, freelancers, or other non-employees. It’s commonly issued for various types of income, such as payments for services, rents, or prizes and awards.

The 1099-NEC form is used specifically to report Nonemployee Compensation. This form was reintroduced by the IRS for the 2020 tax year, as it had previously been reported on the 1099-MISC. The primary purpose of the 1099-NEC is to report payments made to independent contractors, freelancers, and other non-employees for services rendered

1099-INT: This form reports interest income, such as interest paid by banks, savings accounts, bonds, notes, and other sources.

1099-DIV: This form reports dividend income, such as dividends paid by corporations, mutual funds, and other entities.

Click search Icon on top right corner or use hotkeys (Alt +Q). Search for Feature Management.

Feature update highlighted below. Edit the list by clicking on Edit List. Enable it for all user.

System Pop up with below warning message, click on Ok.

System starts the “IRS form Guide” window. Click on Next.

Click on Next. Define the Reporting Year (e:g 2025). You can either create the new setup (Create a new default setup data) or transfer existing data (Transfer the existing data from 1099 base application). In this case we are creating a new setup.

Collect Details For Line: If the field is checked, details are collected from the IRS 1099 form Doc line detail page for each of Calculated Amounts. If not checked then total amount is calculated without details.Protect TIN: This is used to mask the TIN information. There are three option, None, Protect TIN For Vendors, Protect TIN For Vendors and Company. Based on selection the system masks the first five digits as XXXXX and prints only last four digits of the nine-digit number, providing more security when sending documents. (XXXXX9999).

Here we are selecting option Protect TIN For Vendors.

Click Finish, the feature is enabled for all users.

On IRS Forms Setup, the fields are updated as defined during setup of IRS form.

Click on “Email Content Setup” action to setup details of the email you want to send to your recipients.

In case of any further assistance on IRS 1099 process, please reach out to us at sales@relgyatech.com

Thanks!!

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Cont. to next blog…..

Part 2:

Dynamics 365 Business Central 2024 Wave 1 (BC Version 24): E-file IRS 1099 forms without Integration-2.

Part 3:

Dynamics 365 Business Central 2024 Wave 1 (BC Version 24): E-file IRS 1099 forms without Integration-3.