The following examples illustrate 1099 income calculation.
|
Income and Payments |
Amounts |
|
Voucher: 1099 Income Non-1099 Income Total |
$100 $ 80 $180
|
|
Total Prior Year Payments Total Current Year Payments Total
|
$ 70 $110 $180
|
1099 Income = Total Current Year Payments or (1099 Income - Total Prior Year Payments)
Total Current Year Payments = $110
(1099 Income - Total Prior Year Payments) = ($100-$70) = $30
Because $30 is less than $110, Costpoint uses $30 as 1099 income. After the prior year payments, only $30 of 1099 income remained to be paid off in the current year. The other portion of current year payments was made on non-1099 income.
|
Income and Payments |
Amounts |
|
Voucher: 1099 Income Non-1099 Income Total |
$100 $ 80 $180
|
|
Total Prior Year Payments Total Current Year Payments Total
|
$ 20 $ 60 $ 80
|
1099 Income = Total Current Year Payments or (1099 Income - Total Prior Year Payments)
Total Current Year Payments = $60
(1099 Income - Total Prior Year Payments) = ($100 - $20) = $80
Because $60 is less than $80, Costpoint uses $60 as 1099 income. While the voucher included $80 of 1099 income after prior year payments, the vendor only received $60 of that in the current year. The vendor should be taxed only on income received.