Create 1099 File

The first step in creating 1099s. Creating the 1099 file will total all information for the year and store it in two places. The first is the regular 1099 file, and the second is the 1099 detail file. The regular 1099 file is what will print on the 1099s. The 1099 Detail file is broken up by well and includes more detail. This detail file is used to create the 1099 Reconciliation Report.

You will have to create the 1099 file before you can make view, print, edit, or create a magnetic file with the 1099s.

Do not create the 1099 file until you have completely processed all information that will take place in the given year. You can create them prior to this point but they may be incorrect. If they were created earlier you can simply create the 1099 file again. If you recreate the 1099 file for a year that has already had them created the old records for that year will be overwritten with the new records. So if any changes were made they will be lost.

Create 1099 File for year - The year that you want to create the 1099s for.

Build 1099s by Well - Mark this option if each well has its own tax ID number. This will then create the 1099s using each well as the payer instead of your company. If an investor has an interest in multiple wells then he will receive a 1099 for each of them. Generally this option will not be marked. If you are unsure if each well is defined as its own tax identity you can consult your tax advisor. If you are using this option each well must have a tax ID specified for it on the options tab of the well information window. When viewing any 1099 reports you will need to remember to mark the "by well" option.

Exclude Transportation Revenue - Transportation revenue will not be included on the 1099 if you have this option marked. Generally this option will not be marked. This will be used if you had any marketing costs allocated to owners using the "TRANS" revenue type and you feel these amounts should not be reported on the 1099.

Create 1099s by Tax ID - Different owners with the same Tax ID will be merged and will receive one consolidated 1099 if this option is marked.

Only Include Revenue Earned this Year - By default this option will not be marked. SherWare suggests leaving it unmarked.

UNMARKED - With this option unmarked an owners' suspense activity will be taken into consideration when calculating their 1099 amount. For an example of how this works, consider an owner who is below the check minimum at the end of one year and this is then released during the following year. The 1099 will report this under the year it is actually paid to the owner.
MARKED - With this option marked suspense will be ignored. An owner's 1099 will then report only what he earned during the year, regardless of what you actually paid them. Amounts will report on the 1099 the year that they are earned (Date of run closing that processed them) and not the year that you actually paid them for it. Amounts earned the year of the 1099 that are still in suspense will report on the 1099.

Create - Click on the "Create" button to create the 1099 file for the selected year.

"Selected Year Has Not Been Approved"
If you get a message saying Selected Year Has Not Been Approved... when you create the 1099 file then you just need to be aware that the IRS has not yet released the 1099 standards for the year that you are creating the 1099 records for. If the IRS decides to change the standards then your 1099s may not be correct. You can still create the 1099s but it will be based off of the prior year's standards. You can recreate the 1099s again at a later time and it will replace them with the correct information if any changes are made. Once the IRS releases the standards then we will put out a patch with any necessary changes and remove this warning. If you feel the IRS should have already released the standards by now then you can check our website to see if you are at the latest version of the software. If you are not at the latest version of the software then you will need to update to the latest version of the software and this message will likely be removed.