There is nothing quite like coming off a long weekend just to have to jump into 1099 preparation and reviewing regulatory compliance. Happy New Year, I guess? I hope this blog makes it a little happier with some great additional functionality that can enhance your organizations 1099 process.
If you are fortunate enough to work within the D365 Finance application, reviewing and printing 1099s is a rather simple process. But did you know your D365 environment might not be up to date with the latest IRS changes to 1099 forms? Chances are that the IRS made changes to the forms within the last 2 months. In the chaos of the holidays, preparing for year end, and that much needed time off at the end of the year, your organization’s D365 application may not have received any updates, including those for 1099s.
Here is a quick guide to help you and your organization review your application to ensure you have the latest update and tools at your disposal.
Updates to 1099 forms for 2021
Navigate to your organization’s Microsoft Dynamics Lifecycle Services (LCS) and select the project for which you will be generating 1099s within. Most likely, this will be your D365 Finance project. Select the Issue search tile in the Project tools section.
Enter your search terms. A simple search with terms like “1099 2021 change” yields the following report.
Depending on the current release your organization is utilizing, you will need to identify the earliest version where the update is available. For example, if your organization is utilizing release 10.0.21, you would need to ensure update 10.0.960.140 is available in your environment.
If a quality update exists for any regulatory changes from the IRS, check that the version that is installed in your environment would contain the relevant update.
Select the “Help and Support” Button on your D365 Browser top right corner, then select About
Compare the Installed product version to ensure the latest update is the same or after the available quality update for the issue. If the installed version is higher than where the resolution is available, you have the necessary updates to your D365 environment. If the version is lower than the where the resolution is available, work with your system administrator to determine the appropriate steps to ensure the update is completed.
Once you can confirm or install the latest update from Microsoft to include the update for regulatory compliance, review Feature management and see if there is a feature to be enabled. Some features may enable by default if Microsoft determines they are mandatory. Enable if necessary to ensure regulatory compliance. In the instance of the update for 2021, it is mandatory and will be enabled by default.
Update 1099 Minimums
The IRS changes reporting requirements year over year. Ensure your D365 environment is up to date with the latest IRS documentation on the minimum amounts for Tax 1099 Fields. With your IRS documentation in hand, navigate to Accounts payable > Periodic tasks > Tax 1099 > 1099 fields. Update the Minimum amount value to align with the updated IRS documentation.
Update 1099 information for multiple vendors
If this isn’t your first year issuing 1099s in D365 Finance, you may remember having to update vendor 1099 information vendor by vendor. This can be a monotonous process where you can easily miss a vendor. Lucky for you, Microsoft released a new feature mid 2021 to allow users to update all 1099 transaction information at once, rather than vendor by vendor. This will ensure all transactions are captured for use on the 1099, just in case transactions occurred before the vendor 1099 information was setup/updated. If this feature sounds appealing, “Update 1099 information for multiple vendors” can be enabled in Feature Management.
Now you can navigate to Accounts payable > Periodic tasks > Tax 1099 > Update 1099 information for multiple vendors and update all the 1099 vendors at once. Depending on the number of 1099 vendors your organization has, this can save you quite a bit of time. Check out Microsoft’s related documentation on this new functionality.
Whether it is an update in format or a changed minimum amount, ensuring that your organization is up to date with the latest IRS regulations is a critical step that may save your organization time, money, and a bit of headache.
MBrittany Burke is a Solutions Architect for Caf2Code.com, your go-to Microsoft Gold Certified Dynamics 365 development consultant agency. Read more →