1099-MISC NEC and Non-NEC Income Separation for 2019 - Financial Operations Network
Regarding 1099-MISC reporting filing deadlines, an IRS recommendation for 2018 becomes a requirement for 2019. Get it right or face extra penalties.
1099 reporting; 1096; W-9, W-8, IRS penalties
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1099-MISC NEC and Non-NEC Income Separation for 2019

1099-MISC NEC and Non-NEC Income Separation for 2019

Get It Right or Face Fines

As most readers of this newsletter will know, the deadline for reporting 1099-MISC forms that report non-employee compensation (NEC) in box 7 is now January 31 (for both paper and electronic filing). It is no longer February 28th for paper or March 31st for electronic filing, as in the past.

This change applied to 2018 reporting of 2017 payments, and of course will apply in 2019 for 2018 payment reporting, and on into future years.

What you may not know is that if you are late sending in 1099s with NEC and you combine the none-NEC reporting with the NEC reporting (a mixed submission), the whole batch is considered late and subject to penalty.

That’s why for 2018, the IRS recommended that you separate your NEC filings from your non-NEC filings, and if submitting on paper, you complete separate 1096s for the separate batches.

In 2019, you will be required to separate late 1099-MISC NECs from other 1099-MISC filings. And if you have the less common situation of having paid two types of income to one entity, and you file after the January 31 deadline for NEC, you will have to file two 1099-MISCs with the IRS, separating the payment types.

The IRS advises that it will reject a mixed electronic submission with a single payer “A” record after January 31, 2019. But if the filter doesn’t catch it and the submission goes through, it will be subject to the Section 6721 penalty for late filing.

Likewise, a mixed submission of paper forms under one 1096 could result in your being assessed a penalty according to Section 6721 for failure to file by the January 31st deadline.

It is okay to send the payee a single 1099 including all payment types. You are not required to separate recipient statements, even though you report NEC and non-NEC separately to the IRS. Of course, the deadline for sending payee statements is January 31st, as it has been in the past.

The easiest way to avoid trouble is to get your 1099-MISCs done and filed with the IRS by the January 31st deadline. But sometimes that doesn’t happen. So remember: If you’re late, separate!

To help avoid being late, practice good vendor onboarding by getting vendor W-9s and W-8s up front, so you are not chasing them down at the end of the year. Ideally, get them electronically through a vendor self-service portal.

To learn more about vendor verification and compliance click here to request more information or call (678) 335-5735.



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For most organizations, deploying a technology solution is a significant investment, and like most investments, the decision point ultimately comes down to the expected return on that investment.

According to a recent benchmark study by The Accounts Payable Network, 60% of AP customer service calls are from vendors while 40% are from internal customers. Vendor issues actually make up even more of the AP call volume than the 60% identified. Many times when a vendor has an issue, the vendor contacts their buyer or purchasing representative, who in turn contacts AP. Even though the call comes from an internal customer, the question originated with the vendor.

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Easy and Economical Solution to Serve Vendors Around the World

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The key to good customer service is to provide the information that the customer wants when they want it. Whether your customer is a vendor waiting for a payment or a colleague that needs information on payment status, they want their information right away. If your organization has vendors and offices in other countries, they can be challenging and expensive to serve. But, with InvoiceInfo, your international vendors and internal customers can access the information they need when they need it.

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Enhance AP’s Role As a Strategic Partner

Learn how InvoiceInfo can help AP do more with less while continuously improving productivity and bottom-line results.

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Enhance Vendor Relationships

InvoiceInfo helps suppliers’ AR departments with simple and convenient access to invoice payment status online at a cost savings for all involved.

It may seem that the organization paying the vendor should hold all the cards in the relationship. But sometimes the opposite is true. Past-due payments and customer service perceptions can harm supplier relationships and disrupt the supply chain.

Your vendors and vendor relationship managers are living in a dynamic, fast-paced environment, so when invoice information is required, it is needed quickly and expected to be of high quality. With InvoiceInfo, your suppliers get answers to invoice inquiries real time, 24/7 with no need to leave messages and wait for responses. Studies show that confidence in data increases when suppliers access invoice and payment information themselves.

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Give Procurement and Buyers the Tool They
Need to Respond to Vendors Quickly

Not only can InvoiceInfo be used by suppliers to learn the status of invoice payments, it can also be used internally within your organization.

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By providing the vendor with a convenient and credible online option to get the answers it needs regarding payment status, you can eliminate multiple calls/emails between the vendor and the requisitioner saving time and money.

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Eliminate Difficult Vendor Calls and See
Productivity and Staff Morale Soar

Reduce invoice payment inquiries and “promote” your vendor service team to more satisfying and profit-producing tasks.

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Simplify and Streamline Vendor Onboarding

According to Price Waterhouse Coopers, the average organization spends about $20 in labor to file each paper document, approximately $120 in labor searching for each misfiled document and $220 in re-creation of a document.

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Verify the Accuracy of Vendor Information and Stay in Compliance with IRS and Treasury Department Regulations

Government regulators are increasing the complexity of regulations and penalties associated with vendor-related non-compliance.

Penalties for incorrect 1099’s have more than doubled in recent years. Over the last several years, OFAC has levied more than $1 billion in fines against American companies or subsidiaries that did business with restricted businesses, organizations and individuals on its SDN list. In addition to fining these companies, the Treasury Department posts the names of infringing organizations along with fines paid.

VendorInfo Onboarding Module verifies the accuracy of vendor information and helps protect your organization by avoiding embarrassing penalties and fines.

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