Processing 1099 Forms in Orion

Processing and creating 1099 Forms is done once a year and can be a challenging and intimidating task.  Procedures performed on a daily, weekly or monthly basis are easy to remember.  Those performed only once per year require “refreshing” your memory every time you need to use the procedure. The key to making the production of 1099 Forms easier and less stressful is in setting up Vendors correctly on the front end and in knowing how to get the most out of the 1099 processing program.  


SETTING UP THE SYSTEM FOR 1099 PROCESSING

When a Vendor is entered in Orion, you may set up the Vendor to receive a 1099 Form.  This setting is located on the “Accounting Information” Tab of the Vendor Entry screen.

Choose the 1099 Type and enter the Tax ID to which payments will be reported. This setting is used in Voucher Entry to determine how each line of distribution should be flagged - include or do not include on 1099. The setting on the Vendor is used as a “default” when entering Vouchers using the Vendor Code and DOES NOT control whether or not a 1099 record is created during 1099 processing - that is determined by the flag on the Voucher distribution line.  When you enter a new Voucher, Orion looks at the 1099 Type and defaults each line of distribution to the Vendor setting. If the Vendor is set to a 1099 type other than “None,” the Voucher distribution line will default as follows:

You may change this flag on each distribution line.  In other words, some payments (or portions of payments) to Vendors can be included on a 1099 Form and some can be excluded from 1099 reporting.  This also allows you to flag Vouchers “on the fly” to be included in 1099 processing if the Vendor has not yet been set up for receipt of a 1099 Form.

If a Voucher distribution line was not properly flagged prior to posting the Voucher, you may change the flag by adjusting the Voucher or by editing the line through the Vendor Status program.  Any Voucher distribution line that contains activity affecting a Client-Matter should be edited through Vendor Status.

To edit the 1099 flag on the distribution line of a posted Voucher without going through the Voucher Adjustment process, call up the Vendor in Vendor Status. Once the Vendor information is displayed, access the Vouchers Tab and locate the appropriate Voucher.  Right click on the Voucher and choose the Change 1099 Flag option.  The following screen will appear:

All distribution lines for the Voucher will be listed with the 1099 flag as the first field (check box) followed by the General Ledger account number and description, the distribution line amount and a small portion of the Voucher distribution description.  There is no grid-like maneuverability and the distribution lines are sorted by account number.  To set the 1099 flag on the distribution line to true, place a check mark in the box on the left. To set it to false, remove any check mark.  Click OK to accept your changes.  Changes to the 1099 flag must be made prior to creating the 1099 work file.


PREPARING FOR 1099 PROCESSING

Prior to processing your 1099 Forms for the year, we recommend you do a trial run to look for missing addresses and Tax ID numbers and to check that Vendors/Vouchers have been set up properly.

    1.    Run the Total Vendor Payments Report (found under Accounts Payable Reports) for the year you are processing.

    2.    Create the 1099 Work File for the same year and check for missing addresses and Tax ID numbers.

    3.    Compare the amounts in the 1099 Work File to those shown on the Total Vendor Payments Report.

    4.    Check to make sure any Vendor listed on the Total Vendor Payments Report that should receive a 1099 Form is also listed in the 1099 Work File.

    5.    Records in the 1099 Work File can be edited; however, to avoid confusion and extra work, you should attempt to have all changes/corrections to Vendors and Vouchers made prior to creating the “final” 1099 Work File.


PROCESSING 1099 FORMS

The processing of 1099 Forms in Orion is done through the AP Manager by accessing the ACTION Button and choosing the 1099 Processing option.  Once this option is chosen, the following Window will appear:

The first time you ever open the 1099 Processing window, all fields available in the Work File are displayed in the grid.  To remove columns from the display, right click and choose Select Grid Fields. Once the “Customization” window appears, click on a column header and drag it into the Customization window.  This will remove the column from the Work File display but does not delete the data.  A suggested view would include Vendor Name, Vendor Tax ID, YTDPayments, Currency1, Currency2, Currency3, Currency4, VendorStreet1, VendorStreet2 and VendorCityStateZip.  

TIP:    When the 1099 Work File is being created, the status or working bar is displayed at the bottom right of the AP Manager window or the main Orion Desktop window.  A status bar is NOT displayed in the 1099 Processing window.  For this reason, we recommend you not maximize the 1099 Processing window until after you have created the Work File.  You should be able to see the bottom of the AP Manager window or the bottom of the Orion Desktop window as shown.

The information you see when the 1099 Processing window is first displayed depends on what your default view is set to (if any are defined - see below) and whether or not you have created a 1099 Work File.  If you need to create your 1099 Work File, click on the CREATE WORK FILE Button.  The following Window will appear:

Once you have completed the requested information and clicked the OK Button, Orion will go out and look at all Checks written (on all banks) in the specified date range.  Once it locates the Checks it will look at the Voucher distribution lines of the Vouchers paid by these checks and see if they were flagged to appear on a 1099.  All such distribution lines are totaled for each Vendor and a record created in the 1099 work file with the amount calculated placed in the YTDPayments column regardless of the 1099 Type.  A Vendor does not have to be flagged for a 1099 in order to be included in this Work File - they only need to have had Vouchers paid where distribution lines were flagged to appear on 1099s.

As the program gathers the Voucher distribution lines flagged to be included on a 1099, it looks at the Vendor record to see if the Vendor is set for a 1099 and places the 1099 Type in the Work File field called “1099 Type.”  If more than one Vendor has the same Tax ID (this includes more than one Vendor record with a blank Tax ID field), the program will return a message that a duplicate was found and let you know it is creating a record for the “second” Vendor in the Work File and flagging the 1099 Type as None.  If you are running this for the first time, you may have to go through this process quite a lot if you do not gather Tax ID information up front from your Vendors.  Below is a sample of the message that appears when duplicate Tax ID’s are found:

After the Work File has been created, data may be manipulated in the work file by sorting on any column or filtering using the standard “columnar” filters.  

NOTE:     If you already have a default view defined that filters out Vendors paid less than $600.00, you will need to click the REFRESH Button after creating the Work File.

You may make any edits necessary in this work file and they will not affect actual Check data,  Vendor data or Voucher data.  Vendor related changes made in the 1099 work file (i.e., address, Tax ID) will not change the actual Vendor record. The changes will also need to be made through Vendor Setup for future 1099's. Likewise, editing the same information in Vendor Setup does not carry over to the 1099 Work File until a new Work File is created.  You may also add an entry to receive a 1099 Form - even if the recipient is not set up as a Vendor in the system.  Just click the NEW Button and add the entry.

To edit an individual record, double click on the record and it will open in the Record Entry view.  Make the necessary changes and click the SAVE Button.

To edit multiple records at once, select the appropriate records, right click and choose the Edit Selected option.  The following screen will appear:

Choose the field(s) you want to edit and click the NEXT Button.  A screen similar to the following will appear:

Enter the new values, click NEXT and then FINISH.

When the 1099 Work File is created, Orion places the total for each Vendor in the YTDPayments field.  The standard Orion 1099-MISC Form outputs the value in the YTDPayments field to Box 7 (Nonemployee Compensation) on the 1099-MISC Form.  If you need to report the payments to the Vendor in another box on the 1099-MISC Form, move the amount to be reported to one of the Currency fields (1 - 4) available (don’t forget to remove the amount from the YTDPayments field).  The Currency fields in Orion are output to the following boxes on the 1099-MISC Form (based on the Orion system 1099 style).

Currency1 is output to Box 14 (Gross Proceeds Paid to Attorney).
Currency2 is output to Box 1 (Rents).
Currency3 is output to Box 3 (Other Income).
Currency4 is output to Box 6 (Medical and health care payments).

To print your 1099 Forms, select the records you want to print, click the REPORTS Button and choose the Print Selected 1099s option. You should always print your forms to white paper first in case there are any alignment problems.  Since every printer is a little different, there may be a need to adjust the alignment of the forms.  If this is necessary, please give us a call and we will take care of it.

NOTE:     Always choose to Print Selected 1099s.  Otherwise, the program will print a 1099 Form for all calendar year records in the work file regardless of the filter or view you currently have set.

You can re-create the 1099 work file at any time for any year; however, in order to do this, you should first delete the existing records in the work file for that year.  This can be done by clicking the TOOLS Button, choosing Delete Year and specifying the year.

NOTE:    If the 1099 Work File is created for a year for which you have already created the Work File, existing records are NOT overwritten.  If you do not first delete the records for the year you are re-creating, you will have multiple records in the file for each recipient.

After you have printed your 1099 Forms and determined they are ready to be mailed, you may print the Form 1096 (Annual Summary and Transmittal of U.S. Information Returns).  Before printing this form, be very careful to select ALL the records for which you printed a 1099-MISC Form.  You must select the exact same records in order for the “Total Amount” and “Total Number of Forms” fields on the 1096 to be calculated correctly.  The Form 1096 is designed to output the Name of Person to Contact, Telephone Number, Email address and Fax Number if you so desire; however, in order to do this the Form must be manually edited through the styler.  You may do this yourself (see below) or you may request assistance from Orion support.  Since there are a limited number of the preprinted 1096 Forms provided with the 1099 Forms, we recommend you print the 1096 to white paper first and make sure it aligns to the actual preprinted form.


CREATING VIEWS

To better manipulate and filter your data, you should create at least one custom view.  Following are instructions that will create a View that limits the records displayed to those with a value in the YTDPayments field of $600.00 or more and a value greater than $0.00 in the Currency1, Currency2, Currency3 or Currency4 fields.

To create a View, choose TOOLS, Define View and then click the NEW Button.  The following will be displayed:

Enter a name for the Query and if you want to make this View available to others, check the “Make this Query Public” option.  To refine the Query, click on the QUERY DETAIL Button.  The following will appear:

Under the Query Criteria section, select (click on) “CalendarYear is Identical to 2011" and notice how the “Query Statement” at the top changes to give you the details of this Query.  On the actual Query Statement at the top, check the “Runtime” box.  This will cause the program to prompt the user for the Calendar year when they choose this View allowing the View to be used from year to year.

Now you need to add a line to the query that filters out records where the YTD Payments were less than $600.00.  To do this, click the ADD ITEM Button.  In the Query Statement section click on the drop down for the Field and Choose “YTDPayments.”  Choose “Greater Than” for the Operator and then enter 599.99 in the Value field.  Next, click the NEW GROUP Button and you will see a new “Group” line appear directly above the YTDPayments Greater Than... Line. Highlight the new Group Line and change the operator to “Any.”  Your screen should now look as follows:

Click ADD ITEM to add a new query line under the new group. Highlight the new item and in the Query Statement section click on the drop down for the Field and choose “Currency1."  Choose “Greater Than” for the Operator and then enter 0.00 in the Value field. Perform this ADD ITEM function to add a line for Currency2, Currency3 and Currency4.  When you have added all items, your query screen should appear as follows:

If everything looks okay, click the OK Button.  Once back in the list of Views, highlight the View you just created and click the SET AS DEFAULT Button.  This will be the View (Filter) set every time you enter 1099 processing unless you change the Default View to another defined view.


UPDATING YOUR FORM STYLES

Although the IRS may not change the layout or format of the 1099-MISC Form or the Form 1096 every year, there can be slight alignment changes needed due to the change in printing presses from year to year.  As soon as the 1099 Forms are available from our supplier, we test the 1099 and 1096 styles on the current year form and make adjustments to the styles as needed.  Although these changes are then compiled into the program, your firm may not get the update prior to the deadline for printing the forms.  If there are any changes needed on the forms, not only are they compiled into the program but we also provide the revised form styles on our FTP site and will let you know of this (and the appropriate link) so you can download the revised styles.  Once you have downloaded the styles to a location accessible by the Orion program, you can load the styles on your system by doing the following:

    1.    If you do not already have an existing Folder on the Site Defined/Custom Reports Tab in the Reporting System, you need to create one.  To do this, access the Tab, right click and choose New, Folder.  Enter a Folder name and click OK.  

    2.    Access the Standard Reports Tab and locate the Form 1099 Report under the Journals and Registers Folder.  Right click on the report and choose Add to Firm.  A list of the Folders on the Site Defined/Custom Reports Tab will appear.  Choose the Folder under which you want to place the report and click OK.

    3.    Access the Site Defined/Custom Reports Tab and locate the Form 1099 Report.  Right click on the report and choose Edit.  A screen similar to the following will appear:

    4.    Click the ADD Button and the following screen will appear:

    5.    Browse to the location where you saved the new style files, highlight the file named AP1099.rtm and click the OPEN Button.  The following will appear:

    6.    Type in a name for the template and click the OK Button.

    7.    Repeat steps 1 through 4.                            

    8.    Browse to the location where you saved the new style files, highlight the file named AP1099Form.rtm and click the OPEN Button.

    9.    Type in a name (i.e, 1096 Form 2012) for the template and click the OK Button.

    10.    Click OK to close the Edit process and you have updated your forms.  When you print your 1099 Forms or the 1096 Form make sure you choose the new style(s) you added.

NOTE: If there is more than one occurrence of the Form 1099 Report on the Site Defined/Custom Reports Tab, the styles you are offered at the time of printing are always pulled from the first occurrence.  Therefore, you need to either make sure you have only one occurrence of the report or add the new styles to the first occurrence.


EDITING THE FORM 1096

The Form 1096 (Transmittal Form) provides for the “Name of Person to Contact,” “Telephone Number,” “Email address,” and “Fax Number.” Since these items are either not held in the 1099 Work File or are held in a format not compatible with the pre-printed 1096 Form, they must be hard coded in the Orion 1096 style.  You may edit this style yourself or you may have Orion support do it for you.  Should you like to try it yourself, following are the instructions (the instructions assume you are familiar with the Orion Reporting system and editing reports/styles).

Locate the Form 1099 report on the Site-Defined/Custom Reports Tab.  Highlight the report item, right click and choose Edit.  When the Report Editor window appears, highlight the Form 1096 template and click the Copy button.  The 1096 Form style will be displayed in the Report Builder and look similar to the following:

The objects you see in red are for reference purposes only and will NOT print on the actual form.  

To edit a field, click on that field and then enter the correct information in the “label” box near the top of your screen.  Following is an example:

Once you have made all the edits, choose File, Save or File, Save AS and assign a Template Name.  Exit the Report Builder and test your changes by printing the form to white paper.