1099 Setup Options

The following setup fields/options will affect the 1099 Processing:

Company Information
Misc Preferences
Owner Information
Well Information
Programs
Vendors
Close a Revenue Run
Create Delay Rental Checks
Create 1099 Magnetic Media File

Company Information
When previewing any 1099 reports the report will pull the information from this window for the company that is filing the 1099s. If you have to file 1099s for multiple entities then you should have each filing entity setup in SherWare as a separate company. If you have multiple companies setup in SherWare you will have to create the 1099s separately in each of them. The software will not automatically consolidate the information between companies. If you need this done you can manually update the amounts on the "Update 1099" window after the 1099s are created.
Company Name - The name of the company that is filing the 1099s.
Address/City/State/Zip - The address for the company that is filing the 1099s.
Phone Number - The Phone number that will print on the 1099 for the filing company.
Tax ID Number - The tax ID assigned by the IRS for the company that is filing the 1099s.
Contact Name - Your companies main contact for the 1099 processing. This will be used on the 1099 Magnetic Media File.

Misc Preferences
Where you will specify the minimum amounts for someone to receive a 1099 and determine if the 1099s will be based on net or gross revenue.
Minimum Royalty Int 1099 Amount - When the 1099s are created they will only be created for royalty/override owners if they earned more than the amount specified here. The minimum is specified each year by the IRS within the instructions for the Form 1099-Misc.
Minimum Working Int 1099 Amount - When the 1099s are created they will only be created for working interest owners and vendors if they earned more than the amount specified here. The minimum is specified each year by the IRS within the instructions for the Form 1099-Misc.
Build 1099s Based on Gross Revenue - This option determines whether the 1099s will report an owner's net or gross revenue on the 1099. By default, this option will be marked. You will have to unmark it if you want the 1099s built on net revenue.

There was always debate between our clients about whether the net amount (check amount) or the gross income earned should be reported to the IRS on the 1099. The wording of the IRS instructions used to be fairly vague, so we were forced to offer an option about whether the file should be built using net revenue or gross revenue. The current wording of the IRS (from the 2009 instructions) is much clearer: "Enter gross royalty payments of $10 or more before reduction for severance and other taxes that may have been withheld and paid." And "Gross oil and gas payments for a working interest." We continue to offer the option for how to report the revenue, but it has become clearer in recent years that the intent of the IRS is to have the gross revenue reported to them for all oil and gas 1099s created.

Owner Information
Each entity that is to receive a 1099 will need to be marked to get a 1099 and have a Tax ID Specified. If an entity has multiple tax IDs and should receive a separate 1099 for each then you should have a different "owner" setup for each tax ID. Each owner will only receive one 1099 in a company. If you have multiple companies setup in the software then the owner will receive a separate 1099 for each company.
Address Tab:
Owner ID - Will print above box 15 as the account number on the 1099.
Name - The name that will appear on this entity's 1099.
Address/City/State/ZIP - The default address that will appear on this entity's 1099.
Second Address Tab:
Address/City/State/ZIP - The address that will appear on this entity's 1099 if the option to "Use Secondary Address" is marked for this entity on the options tab.
Codes Tab:
Tax ID - The Social Security number or tax ID for the entity.
Options Tab:
Use Secondary Address - If this option is marked the address on the owners 1099 will be based on the address specified on the "Second Address" tab instead of the "Address" tab.
Send A 1099 to this owner - 1099s will only be created for owners with this option marked.

Well Information
The well options will only be a factor if if each well has its own tax ID.
Well Info tab:
Well Name - Will print as the payer's name on the 1099 if each well has its own tax ID and you build the 1099s by well. If you are not building the 1099s by well this this will not be used on the 1099.
Options tab:
Account - The tax ID for the well. This will only be used if each well has its own tax ID and you build the 1099s by well. The ID here will be used as the payers Tax ID on the 1099s. If you are not building the 1099s by well this this will not be used on the 1099.

Program/Partnership Information
Program Members Receive 1099s - Amounts distributed for interests associated with a program will only be included on an owner's 1099 if this option is marked. If this option is not marked the amounts from this program will not be included on an owner's 1099 even if the owner is marked to receive a 1099.
Tax ID - This field does not affect the 1099 processing at all.

Vendors
Use the Vendor Center in QuickBooks for any vendor setup information. If any of the information in the vendor center is updated you will need to synchronize the list files so that both programs are in synch. You can do this in SherWare under the utilities menu by choosing "Synchronize List Files with QuickBooks".
Address Info Tab:
Vendor Name (at the top) - The name that will be used on this vendor's 1099.
Billed From Address - The address that will be used on this vendor's 1099.
Vendor is Active - Will need to be marked.
Additional Info Tab:
Account No. - This will print directly above the vendor's address.
Tax ID - The ID for this vendor that will print on the 1099 Form as the recipient.
Vendor eligible for 1099 - 1099s will only be created for vendors that have this option marked.

Closing a Revenue Run
Check/Posting Date - 1099s are based on a calendar year. This means that the date that is used when closing the run as the Check Date will affect the year that the history will be reported for on the 1099. If you use advanced posting, the "Check Date" field will determine what year the information will be reported on the 1099s.

Create Delay Rental Payments
Checks created for owners out of the Land Module will be reported as Rents.

Create 1099 Magnetic Media File
TCC - The Transmitter Control Code assigned by the IRS to each entity submitting 1099s electronically with the FIRE System. You will only need this number if you are filing your forms with the IRS electronically. If you intend to file electronically and do not have a TCC number then be sure to apply for one well in advance of when you will need to submit your files. You will not need a TCC number if you are having SherWare submit your 1099 file for you.