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Topic: Sales Tax and 1099 Reporting E-learning curriculum SAP Business One Topic: Sales Tax and 1099 Reporting.

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Presentation on theme: "Topic: Sales Tax and 1099 Reporting E-learning curriculum SAP Business One Topic: Sales Tax and 1099 Reporting."— Presentation transcript:

1 Topic: Sales Tax and 1099 Reporting E-learning curriculum SAP Business One Topic: Sales Tax and 1099 Reporting

2 SAP AG 2003 Please review the following terminology and menu changes that apply in SAP Business One 2007: As shown in demo:2007 Jurisdictions, Values and Codes Previous menu path: Administration Definitions Financials Tax Define Sales Tax Jurisdiction Types New menu path: Administration Setup Financials Tax Sales Tax Jurisdiction Types Previous form name: Define Sales Tax Codes Previous checkbox name: Expenses New form name: Sales Tax Codes – Setup New checkbox name: Freight 1099 Reporting Previous menu path: Reports Financials Accounting 1099 Report New menu path: Reports Financials Accounting 1099 / 1096 Report Sales Tax and 1099 Reporting

3 SAP AG 2003 Create multiple levels of Tax Jurisdictions from City to Federal Set default values for Business Partners and Items Create Sales Tax Reports Setup 1099 Definitions Create 1099 Reports and submit them At the conclusion of this topic, you will be able to: Topic Objectives

4 SAP AG 2003 Tax Jurisdictions, Values and Codes Step 1 - Define Sales Tax Jurisdiction Type: Administration > Definitions > Financials > Tax Step 2 - Define Sales Tax Jurisdiction Values: Administration > Definitions > Financials > Tax Step 3 - Define Tax Codes: Administration > Definitions > Financials > Tax

5 SAP AG 2003 Default Codes: Customers, Items and Services A/R, Customer Record: Tax codes are associated with customer locations. By default, tax codes are based on the Ship-to Address of a customer in the Business Partner Master Record. A/P, Items: For Item Invoices, the default tax code is based on the default tax code for the Warehouse receiving the goods. This can be found using the following path: Administration > Definitions > Inventory > Define Warehouses A/P, Services: For Service Invoices, it is based on the default tax code of the company which is under Administration > System Initialisation > Company Details > Accounting tab

6 SAP AG 2003 For each item your business buys or sells, you can decide if the item is taxable and also by default, whether tax is calculated normally or on a Use Tax basis. Setting up default behaviour for Inventory Items

7 SAP AG 2003 Use Tax Option Normal Tax No Tax Use Tax These options can be sent by clicking on the Purchasing Data tab on the Item Master record, and changing the Tax Type field. The warehouse used in the A/P document must be defined as Allow Use Tax. Otherwise, the journal entry for the Use Tax item will behave as a No Tax Item.

8 SAP AG 2003 Depending on the Goods or Services supplied, default tax codes are generated appropriately. Customers/Sales Invoices: For Items and Services it is based on the Ship-to location of the Goods Vendors/Purchase Invoices: For Items, it is based on the warehouse where the Goods are shipped to For Services, it is based on the companys default tax code Overriding Defaults: Can be done for tax on any line item How Tax is calculated in an Invoice

9 SAP AG 2003 Sales Tax Reporting You can choose to run tax reports either by one or more Tax Jurisdictions or Codes. You can also choose ranges of dates, source of tax documents, and printing options. The Tax report can be found under the following path: Reports > Financials > Accounting > Tax > Tax Report

10 SAP AG Reporting Features Unlimited 1099 Form and Box combinations Primary 1099 Form and Box values supplied Ability to specify default 1099 types for vendors Opening balances feature Edit 1099 Form/Box/Amount functionality Minimum 1099 reporting definition Submit at year end Appropriate 1099 Reports

11 SAP AG 2003 Setting up 1099 Forms, Boxes and Values Step 1 - Define 1099 Table: Administration > Definitions > Financials > Define 1099 Tables Comes with main form types, others can be added Step 2 - Setup 1099 Boxes: Click on 1099 Boxes Optional: You can specify Additional Expenses for which you want to include in your 1099 calculation. These can be set using the following path: Administration > System Initialisation > Document Settings > General Tab > Tick Manage Expenses in Documents > Click on Define Expenses Step 3 – Specify 1099 Minimum Values Fill in the Minimum 1099 Amount field then click on OK. This can be done for each form/box combination for every vendor prior to running any reports

12 SAP AG 2003 Setting up default codes for A/P - Vendor Record You can specify if a vendor is subject to 1099 processing and the default form and box values to use in invoices. As 1099 information is recorded at the document level, the user can override the default value invoice entry, or edit them later.

13 SAP AG Opening Balances You can manually enter 1099 Opening Balances that represent the total amount already processed in your old system. This can be done for each unique vendor/form/box combination. This can be found under the following path: Administration > System Initialisation > Opening Balances > 1099 Opening Balance This process will not create a journal entry

14 SAP AG 2003 How 1099 is calculated 1099 becomes due on amounts paid not on amounts billed. Invoicing Stage: 1099 Form and Box types are specified at the invoice entry stage 1099 type may be edited later Payment Stage: After payment, 1099 appears in default reports Opening Balance Transfer: Items entered into the Define 1099 Opening Balances window will be included in the 1099 calculation amount

15 SAP AG 2003 Editing 1099 information before and after payment Before Payment 1099 form and box information can be changed After Payment 1099 form and box information can be changed, as well as amounts

16 SAP AG Reporting To access 1099 Reporting, use following path: Reports > Financials > Accounting > 1099 Report Double-click on a row in the report to access the vendor detail by transaction Click on the Print icon to submit the 1099 Report

17 SAP AG 2003 Topic Summary Create multiple levels of Tax Jurisdictions from City to Federal Set Default values for Business Partners and Items Create Sales Tax Reports Setup 1099 Definitions Create 1099 Reports and submit them You are now able to:


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