Transcript UG-2009-11sales-tax-and-1099-reporting

Topic: Sales Tax and
1099 Reporting
Topic:
Sales Tax and 1099
Reporting
E-learning curriculum
SAP Business One
2007 - Sales Tax and 1099 Reporting
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:
New menu path:
Administration  Definitions 
Financials  Tax  Define Sales
Tax Jurisdiction Types
Administration  Setup  Financials 
Tax  Sales Tax Jurisdiction Types
Previous form name:
New form name:
Define Sales Tax Codes
Sales Tax Codes – Setup
Previous checkbox name:
New checkbox name:
Expenses
Freight
1099 Reporting
Previous menu path:
New menu path:
Reports  Financials 
Accounting  1099 Report
Reports  Financials  Accounting 
1099 / 1096 Report
 SAP AG 2003
Topic Objectives
At the conclusion of this topic, you will be able to:
 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
 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:

 SAP AG 2003
Administration > Definitions > Financials > Tax
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
 SAP AG 2003
Setting up default behaviour for Inventory Items
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.
 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.
 SAP AG 2003
How Tax is calculated in an Invoice
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 company’s default tax code
Overriding Defaults:

 SAP AG 2003
Can be done for tax on any line item
Sales Tax Reporting
You can choose to run tax reports either by one or more Tax
Jurisdictions or Codes.
The Tax report can be found under the following path:
Reports > Financials > Accounting > Tax > Tax Report
You can also choose ranges of dates, source of tax documents, and printing options.
 SAP AG 2003
1099 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
 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’

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
 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’
 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.
 SAP AG 2003
1099 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
 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:

 SAP AG 2003
Items entered into the ‘Define 1099 Opening Balances’ window will be
included in the 1099 calculation amount
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
 SAP AG 2003
1099 Reporting
 SAP AG 2003

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
Topic Summary
You are now able to:
 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
 SAP AG 2003