With the start of tax season comes the task of preparing and filing 1099s. In NetSuite, 1099 activity is tracked through the a combination of the vendor record and the GL account setup. Within the vendor record, users add the Tax ID and enter if the vendor is 1099 eligible or not. Within the GL account record, users enter what 1099 category the account activity should be included in, if any.
NetSuite discontinued their 1099 reporting functionality in version 18.2. Instead, NetSuite is encouraging the use of 3rd-party tools for reporting. Suggested vendors include Yearli by Greatland, Sovos, and Track 1099.
A few tips and suggestions for NetSuite users preparing 1099's:
Create a 1099 Vendor Saved Search for reviewing vendor eligibility: build a Saved Search to display vendors with activity in the current year that display's their tax ID and whether they are 1099 eligible. As a reminder, vendors who are sole proprietors, partnerships, or LLCs taxed as a partnership receive a 1099. C-corps and S-corps do not. A good review trick is to check any vendor that includes LLC in the name.
Create a 1099 Account Saved Search for reviewing accounts marked as 1099 activity: Similar to the above search, quickly review accounts and their appropriate 1099 box. A good trick to use for pass-through costs, like reimbursed parking or meals, is to setup a GL account for consulting-pass through costs. Then, don't mark this account as 1099-eligible.
Leverage NetSuite's 'Cash Basis' reporting option: NetSuite gives the option to report on a cash basis when building reports. Combine this functionality with the 'Purchases -> Purchases by Vendor -> Detail' canned report with a filter to include only 1099 eligible vendors to see the cash activity of 1099 vendors. Combine this with the 1099 Account saved search for a nice report to review vendor activity was coded to the correct 1099 box.
1099 compliance is an annual process that every accounting team needs to get done right. Leverage NetSuite's capabilities with these tips to make compliance as easy as possible. If your team needs help maximizing usage of your NetSuite account, please reach out to our team and sign up for our blog for other NetSuite tips.