It recently came to my attention that the state of Oklahoma is now requiring anyone who sends out more than five 1099s to e-file a copy with the state. Since I’m in Oklahoma I felt like I needed to address this. The IRS also requires anyone filing more than 250 1099s to e-file. So this tip is for those two groups of Sage 50 users, and anyone else who’s tired of mailing paper forms.
If you do payroll in Sage 50, you have access to 1099 e-filing through the payroll tax forms (Aatrix) . But the process isn’t as smooth as it is for W-2s, so you may want to consider a 3rd party add-on. We’ll look at the Aatrix option first since that’s built into Sage 50.
By going to the Reports & Forms menu from the main Sage 50 window, then Forms > Tax Forms. Select Payroll Tax Forms from the list and then click the Preview and Print button. In the Payroll Tax Form Selector window, make sure the form type is set to Federal. Then select 2017 1099-MISC from the list of available forms. Make sure Frequency is set to Yearly, and set the year to 2017. Click OK. The next screen asks you to select a data option. At this point you’ll discover that even though Aatrix forms are built into Sage 50, the 1099 process isn’t truly integrated with Sage 50. At this screen you have to choose between importing data from a CSV/TXT file or manually entering it.
Next to the option “Import 1099 recipient data from a CSV or TXT file” there is an Instructions button. It will take you to this page on the Aatrix web site. You can also find similar instructions in knowledgebase entry ID:10519 on Sage’s support site. They instruct you to view the 1099 Vendor Report (Reports & Forms menu > Accounts Payable), then click the Columns button and select All. Use the Excel button to send the report to Excel, making sure to choose the “Raw data layout” option. Finally save that file as a CSV file. After selecting that file on the Select Data Option window you’ll be presented with a very easy to use window that lets you drag and drop field names from your file onto an image of a 1099 form to let the program know where each piece of information should print. The lower part of the screen even gives you a preview of the data from each field. When finished, click the Mapping Complete button. You’ll be walked through answering a few questions and filling in your own company information (it doesn’t automatically read your company information like when printing W2s).
Eventually you’ll be presented with a grid of data that was extracted from your CSV file. Immediately you’ll see that the imported data will take a lot of work to clean up. Every line (individual payment) from the CSV file gets imported as if it will get it’s own 1099, instead of one total for each payee. When you try to go to the next screen Aatrix will see the duplicates and offer to combine them, which would be great if it worked. But in my testing, every time I tried it gave an error and couldn’t do it. So I had to manually delete all the extra rows and type in the correct amount on the remaining line. It also doesn’t split out first and last names, you must do that manually too. And you have to tell it which ID numbers social security numbers and which are FEIN. The filing state isn’t populated either so you’ll have to add that to each line. Also, the payee’s with less than $600 also get imported so you’ll have to delete those.
All of those problems can be addressed when you create the import file. But it takes a lot of effort, time, and knowledge to rework the Vendor 1099 Report in Excel into a layout that doesn’t have all of those problems. I had hoped to give a step by step tutorial in this newsletter but it turned out to be beyond the scope of what I can explain here. I assume that’s why Sage and Aatrix chose to skip over all of that and pretend they gave you instructions that work. If you feel up to trying it, I recommend you read the Excel tip below and well as this tip from a previous newsletter. Both will be helpful with converting the 1099 Vendor Report into a proper import file.
If don’t want to try to build an import file, you have the option to manually enter your 1099 data. I’m not sure if I’d rather do extensive editing of the imported data or just enter it from scratch. You can decide that for yourself.
Once you have the data in Aatrix you can choose the full service option that includes printing, mailing, and e-filing; or print 1099s on plain paper (you should use perforated paper for the payee copy) and just have Aatrix e-file the federal and/or state copies for you. To e-file, you’ll have to create a login and provide a credit card for the charges.
While getting your data into Aatrix is much harder than it should be, the good part about using Aatrix for your efiling is that you don’t have to know anything about where or how to upload your file. They take care of all of that for you.
The 3rd Party Option
There is a product available from iBrain Inc that can read your Sage 50 data and create a file in the proper IRS format. Prices range from $47 for up to 30 1099s to $445 for unlimited 1099s (support is purchased separately). When I reached out to other Sage 50 Certified Consultants looking for a way to e-file 1099s, the people from iBrain sent me a demo copy of their software. While I haven’t actually e-filed 1099s with it yet, I have installed it and created a test file. And I can say that (unlike Sage & Aatrix’s instructions) their manuals do give you step by step instructions that actually work. If you follow their instructions the software installs and works as described. In a relatively short time I was able to install their program, correctly import data from my test company, and create a file suitable for submitting to the IRS or Oklahoma.
Overall, I found getting correct data into iBrain’s e-file program to be a straightforward and reliable process. The only downside is that it only creates the file, which you then submit on your own. However their documentation even gives some instructions to guide you through the process of submitting the file to the IRS.
If you want to e-file 1099s with the IRS you need to go to https://www.irs.gov/e-file-providers/requirements-for-filing-with-fire ahead of time to be prepared for the requirements.
A note to Oklahoma users. According to Oklahoma’s E-Filing FAQ page, they participate in the combined federal/state program, meaning that they will get your 1099 filing information from the IRS if you e-file with the IRS. But if you file your federal copy on paper you’ll need to upload your file to the state using the OKTAP website.
While it’s nice to not have to purchase additional software or manually upload files, having to manually enter or correct all of your 1099 data can be a high price to pay for that convenience (in addition to the processing fees). If you have to issue very many 1099s the time and effort saved by having your data imported into iBrain’s add-on program will easily offset the extra work of installing another program and submitting the file yourself.