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Postings here will focus mainly on Advanced Accounting software updates, tips, and related topics. They will also include general comments relating to troubleshooting PC/Windows/network problems and may also include reference to our other software products and projects including any of our various utilities, or to the TAS Premier programming language. We considered setting up separate blogs for different topics so that users/others could subscribe to topics mostly aligned with their interests, but decided that it would be better to keep things simple since some topics cross over into others. We would nonetheless welcome your feedback/input in this regard. Our web site URL is www.addsuminc.com. Call us at 800-648-6258 or 801-277-9240. We also maintain www.advancedaccounting.us so that older Business Tools users in particular have a greater chance to find us.

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Monday, March 23, 2020

Adv 8 r3 will support IRS form 1099-NEC

Advanced Accounting 8 (release 1, i.e. r1) was released in late September of 2019.  In addition to all of the usual initial updates as well as ongoing development that continues following a major release, rather drastic changes to U.S. federal income tax withholding became final in January of 2020 which Adv 8 r2 addressed along with other changes made since r1.

We have now begun work on r3 which we expect to be available next month (or at least by then a a preliminary r3 release which has been fully tested) which will include many new updates including initial support for the "new" 1099-NEC form that users will be required to use when it comes time to file 1099 forms for 2020.

Form 1099-NEC was first used in the early 1980's and is now being resurrected.  The  Protecting Americans from Tax Hikes Act (2015) required that nonemployee compensation form reporting had to be completed by January 31 (in an effort to combat identity theft and refund fraud).  That isn't a deadline just to provide copies to recipients but also to actually file with the IRS.  And this has been the requirement with respect to form 1099-MISC  box 7 (nonemployee compensation) reporting since calendar year 2016.   For other types of miscellaneous income, the deadline is March 31 if filing electronically, otherwise by February 28.

These differing deadlines for the same form created problems for the IRS in processing 1099-MISC forms in determining whether or not they were timely filed, so much so that we are now going back to the 1099-NEC form for reporting nonemployee compensation starting with 2020.

The old box 7 for nonemployee compensation is gone.

The 2020 1099-NEC.  Nonemployee compensation is placed in box 1.


Within Advanced Accounting, nonemployee compensation will still be considered treated as "type" 6 for purposes of classifying vendors for 1099 purposes (including payments for legal services) that will now print in box 1 of the new form.   Updates to the "1099 Types" lookup in AP-A Enter/Change Vendor information as well as AP-Q Print 1099 Forms have been made to reflect the appropriate box number and form for each type. 

Transmittal form 1096 has also been revised to include a check box for 1099-NEC forms.   Each "type" continues to require a separate 1096 transmittal form, i.e. you submit 1099-NEC forms separately from 1099-MISC forms, each with their own transmittal form.



The 2020 form 1096 transmittal.  Note the 1099-NEC box to the right of 1099-MISC.



The IRS approved forms that are currently available for review can't be used to effectively test actual alignment and position relating to those items which have changed, so when those become available from forms suppliers, we will then re-test the preliminary format changes that we have now made; but we have implemented what should be all of the other related logic changes especially in the AP-Q option which allows the user to choose which of the two forms should be processed among other things.

In addition, Adv 8 r3 will include an option that will allow an end user to make changes to certain report/form layouts including the new 1096 transmittal and the supported 1099-MISC and now 1099-NEC forms in the event of issues with printer margins, alignment, etc.


An e-file option may also be added later depending on end user interest.














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