Presentation on theme: "Defense Finance & Accounting Service DFAS Tax Office August 2010"— Presentation transcript:
1 Defense Finance & Accounting Service DFAS Tax Office August 2010 1099 Tax Reporting ProgramWelcome screen.We hope that by the end of our presentation, you will have a better understanding of why you report payments made via government convenience check in the 1099 Tax Reporting Program, and the affect on the 1099 recipients (the individuals and merchants who receive the payments) if you report incorrect information.Defense Finance & Accounting ServiceDFAS Tax OfficeAugust 2010
2 General – Program Description What is the 1099 Tax Reporting Program (1099TRP)Application created to collect & report to the IRS payments made by DoD for “services”.The 1099TRP is a secure government web based tool for collecting payment data.
3 General – Convenience Checks IRS form 1099-MiscellaneousSANDY’S BAR & GRILL222 SANDWICH BLVDSOMEWHEREWV 24946Partial picture of an IRS form 1099-Misc.
4 General – Convenience Checks Transactions for services are payments made for work performed rather than purchase of goods.
5 General – Convenience Checks Examples of reportablesDry cleaning of uniformsBooth rentals for job fairs/recruitingMaintenance feesInstructor and speaker feesExamples of non-reportablesGoods/productsPayments to any government agencyPayments to Federal tax-exempt businessBy government agency we mean Federal, State, Local, City. Example the Post Office.There are some businesses that are State tax-exempt, but not Federal. If you are in doubt, request a copy of the IRS Determination Letter. If they do not have one and they were paid for services, report the data.
6 System Access User roles & permissions Agency Program Coordinator (APC)Convenience Check Transaction ScreenReviewAddModifyDeleteConvenience Check ReportViewPrint
7 System Access User roles & permissions Approving Official/Billing Official (AO)Convenience Check Transaction ScreenReviewConvenience Check ReportViewPrintNote: It is a conflict of interest to be able to approve payments & have the ability to manipulate payment data.
8 System Access User roles & permissions Checkwriter (Account Holder) Convenience Check Transaction ScreenReviewAddModifyDeleteConvenience Check ReportViewPrint
9 System Access Obtaining user id & password Each person requesting access must completeDD form 2875DD form 2869
10 System Access DD form 2875 (versions 2009) APC, AO, or Checkwriter completesType of Request, Date, System NamePart I, all blocksPart II, blocks 13 thru 20bYour Security Manager completesPage 2, Part III, all blocksTax Office completesLocationPart II, blocks 21 thru 25The current version is Some agencies have created a 2010 version, however, we do not accept it. Only the owner of the form, DISA is authorized to change the form.You must have a positive background investigation. It is unnecessary to have a security clearance.
11 System Access – DD form 2875We accept forms that are digitally signed, faxed, or mailed.
12 System Access DD form 2869 (version 2007) APC, AO, or Checkwriter completesSection I, all blocksAPC completesSection II, all blocksTax Office completesSection III, all blocksThe APC must have access; otherwise, the checkwriter’s access will not work. The checkwriter’s access is linked to the APC’s access. Will discuss this further on in the presentation.The Program allows roles for a Primary APC, one Alternate APC, one Primary AO, and one Alternate AO per checkwriter.
13 System Access – DD form 2869If you are an APC or AO, do not forget to list all of your checkwriters and their account numbers. Also make sure you contact us if a checkwriter leaves or with new account numbers.
14 Initial System Access Sun Java Plug-in Must be loaded on PC Allows user to view applicationMessage will appear if not loadedContact your LAN/Technical Office to load
15 Initial System AccessPublic Key Enabled (PKE) Registration w/Common Access Card (CAC)Receive initial userid & passwordAccess the 1099TRP websiteRequired to register user id & password
16 Initial System Access Registering for PKE Open web browser Input 1099TRP web address.mil agencies: https://dfas4dod.dfas.mil/systems/1099.edu agencies: https://dfas1099trp.csd.disa.mil.mil receives 1099TRP Homepage; .edu does notClick link, “Enter the 1099TRP here”On PKE Screen enter userid & passwordClick Register ButtonReceive message, “Successful Registration”.edu users will not see the 1099TRP Homepage. We can send you are copy of the Convenience Check User’s manual.Screen shows the two links for accessing the Program.If you receive an error message and cannot PKE your machine, please us at Describe what happens and any message you receive. We may have to have your password unlocked and reset.
17 Initial System Access - PKE Screen Picture of the PKE registration screen where the user id and password are input.
18 After PKE Registration Initial System AccessAfter PKE RegistrationUse CAC & CAC pinNo more user id & passwordMust access Program at least once every 90 days to avoid being locked outYou can add a reminder to your calendar to log into the program every 90 days.
19 Initial System Access Steps to Sign into 1099TRP Open web browser Enter 1099TRP web addressReceive 1099TRP HomepageClick link, “Enter the 1099TRP here”Select digital certificate, click OKEnter CAC pin, click OKProgram loadsReceive Warning screen, click OK
20 1099TRP Homepage Link to access the 1099TRP Convenience Check User’s ManualInformational messagesDD Forms 2875 & 2869GSA SmartPay PresentationWhat is & is not reportableIRS Charity SitePublic/Private Colleges & UniversitiesCannot stress enough using the Convenience Check User’s Manual. It has step-by-step instructions for accessing the Program, inputting, modifying and deleting data. It talks about each screen and what goes in it.Informational messages like the Program is up, down, expected to be down, etc.A list of what is and is not reportable. It contains examples to help.
21 1099TRP HomepageWe cannot stress enough the importance of using the Convenience Check User’s Manual. It contains step-by-step directions for navigating the program.
22 System Overview Welcome screen First screen of Program Provides current status of the 1099TRPConvenience Check Data entry pointTool bar
24 System Overview Convenience Check Entry Transaction Screen All users are permitted access to this screenConvenience check data entered hereDivided into 3 tabsTransaction ScreenMerchant ScreenSole Proprietor Screen
26 System Overview – Transaction Screen CategoryNon-Employee CompensationPay merchant/individual for services, not employeeMost often usedRentsPay to use a space or equipmentMedical & Heath CarePay doctor, dentist, or hospitalGross proceeds paid to an attorneyPay attorney for legal services
28 System Overview – Merchant Screen Tax Identification Number (TIN)Social Security Number (SSN)Individual or Sole ProprietorXXX-XX-XXXX Always 9-digits, no lettersEmployer Identification Number (EIN)Merchant/BusinessXX-XXXXXXX Always 9-digits, no lettersMust match name registered on IRSrecordsImportant: Protect the TINs
30 System Overview – Sole Proprietor Sole business ownerOwner and business names differentWilliam R SmithBill’s Lawn Mowing ServiceNot partnership or corporationUsually small businessHas SSN; rarely has an EINSole Proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.
31 Check Report Convenience Check Report Request Screen is accessed from Reports menuAll users have access to their authorized accountsScreen of where the Reports menu resides.
32 Check Report Convenience Check Report Request Can be sorted by Check dateTINMerchant NameMonthYearClick Select boxClick Run buttonScreen where Reports requirements are selected.
33 Check Report Convenience Check Report Request ACCOUNT CONFUSED, DAZED A (Active)CHECK # DATE AMOUNT TIN MERCHANT ISSUED? CATEGORY/25/ XXXXXXXXX VICKY’S GOWNS OF GLORY NO NONEMPLOYEE COMPENSATION2468 DRESS AVE, BOWLING LANE, OH 43352Example of what data is shown contained on a Convenience Check Report.The 1099 Issued? will appear as NO until the forms are issued in January. If the merchant’s payments total $600 and above, a tax form is issued. The column will read YES. If no form is issued, the column will remain NO.
34 General – Purchase Card Do not input any purchase card dataDFAS receives & reports it electronicallyDFAS receives the purchase card data electronically from the main banks, i.e. VISA & MasterCard. It is important for the checkwriter not to report the purchase card data, since this will result in duplicate reporting of the transaction.
35 Updates PKE - no more passwords after initial registration Changes to reporting requirements Section 6041, Internal Revenue Code2011Banks issue tax forms for purchase card paymentsDecision pending on banks issuing tax forms for convenience checks2012Reporting requirements apply to goods & services
36 Web Addresses .mil or .gov web address .edu web address https://dfas4dod.dfas.mil/systems/1099.edu web addresshttps://dfas1099trp.csd.disa.mil.edu – You are unable to view the website homepage. Sorry. We will you information such as what is and is not reportable with your password.
37 E-mail Address firstname.lastname@example.org Access issues Access requests General reporting questionsGeneral Program questionsHey, us
39 Good To Know Enter, Save, Add. Enter, Save, Add… Clear commands – Clear & CancelRemove unwanted record - Delete, SaveFind a record - QueryMove backward or forward - Previous or NextIdle time 30 minutes – Oh, I’m knocked out & must log back inThe function keys allow duplicate check entries so be careful if you use them.The “Clear” and “Cancel” buttons remove commands that are interfering with you reporting the data.If you do not click the “Add” button after inputting data, you are typing over what you have reported. You will end up with one check reported.If you are looking for a specific check or merchant, use the Query button.To navigate through your check data, use the Previous button to go backward and the Next button to go forward.If you take a break and are away from the program for 30 minutes, it will knock you out of the program. That is a security feature. Just log back in when you are ready.
40 Good To Know The tax year is Calendar Year, not Fiscal Year December 31 is the absolute, last dayfor inputting check data!!Or was it December 32?Encourage your checkwriters to input the check data before DecemberAre you planning on taking leave in December? You really need to have your input up-to-date by December 1. Something always happens in December - We take leave, you take leave, the merchant takes a vacation, system issues.
41 You are Responsibilities Whose responsible for inputting & ensuring the convenience check data is reported correctly?You are
42 Responsibilities – All Privacy Act InformationTINsNames & AddressesAccount NumbersPssssst….secure itWe cannot stress enough the importance ofKeeping this information secure.
43 Responsibilities - Checkwriter Obtain merchant info for tax reportingLegal name & addressTax Identification Number (TIN)Obtain check dataCheck numberDate check was writtenCheck amountBrief description of what was purchasedInput merchant & check data at least monthlyReview input for accuracyUse something to capture the merchant’s legal information. We recommend the IRS form titled “Request for Taxpayer Identification Number and Certification (form W-9)” found on our homepage or atThe data needs reported at least monthly. Data can be reported the same day the check is issued if you would prefer.
44 Responsibilities - APC Ensure Checkwriter obtains merchant &check dataEnsure check data is input at least monthlyReview input for accuracyInput data in the absence of CheckwriterCheckwriters need informed of anything that will affect their reporting. If you, the APC, are leaving, the checkwriters need to know who is replacing you.
45 Ensure Checkwriter obtains merchant & Responsibilities - AOEnsure Checkwriter obtains merchant &check dataEnsure check data is input at least monthlyReview input for accuracy
46 Data Review Merchant data free of misteaks? Merchant data consistent?Merchant data free of misteaks?Sole Proprietor correctly identified?Check number correct? No duplicates?Dollar amount correct? No extra zeros?Only reportable data inputReportable data input for any $ amount($600 threshold applies to the Tax Office)There is a $ threshold for reporting payments, exception $10.00 for Royalties. Our office is the final reporting entity; therefore, the threshold applies to our office, not yours. Input all reportable check data regardless of the $ amount.
47 Data ReviewWhat happens when the data isinput incorrectly?
48 Data input incorrectly in 1099TRP APC, AO, & Checkwriter do not review dataDFAS issues tax forms & reports data to IRSIRS forms are issued to “real” people. What you report affects their income and their reporting to the IRS. No one wants to be audited by the IRS.Angry merchant contacts DFASIRS audits merchant
49 What happens when an angry merchant contacts us? You could be taken on a three-hour tour
50 AuditsWhat happens when you are audited and you did not report your check data?You’ll be sorryAnd you will be audited at one time or another.
52 Audits APC & AO List of Checkwriters AO & Checkwriter Checkwriter Account numbers1099TRP Convenience Check ReportAO & CheckwriterReceipts/invoices for transactionsCheckwriterLogbook, checkwriter, & Internal records
54 Tax Office End-of-Year 2009 In November and December, we received approximately 343 System Access Request forms, 1,523 password reset requests, 772 access issue inquiries, and 2,369 general and informational inquiries.We are still adding new account number due to the SmartPay II. We added 957 new account numbers.It really is in your best interest to have everything up-to-date, all accesses approved, and all earlier check data reported before the November/December timeframe.The best way to contact us at the end of the year is to us.
55 Tax Office - Contacts Vicky Waldron – Primary Sandy Major – Alternate Gayla Vincent – Program Managerhttps://dfas4dod.dfas.mil/systems/1099https://dfas1099trp.csd.disa.milfax number:DSNContact me?Dy-no-mite!Contact our office with your inquiries and technical problems. Do not contact the DFAS Web PMO; they can not assist you.
56 The EndMother elephant and baby elephant walking away signifies the end of the presentation..