Annual Detail Reporting

Ready for year-end reporting? Let's talk about the data you need from your Strongroom portal.

AvidXchange does not provide tax advice. The information presented on this page is based on research and is meant for educational purposes only. You should consult with your tax accountants before making any decisions on completing or filing  forms 1099-MISC, 1099-NEC or any other tax forms for the calendar year of 2020.

A 1099-MISC form is similar to a W-2, and is used to track the income of independent contractors or businesses who are not set up as corporations. Broadly speaking, it is given to non-employees paid by your business.

The general rule is that you must issue a Form 1099-MISC to any vendors or sub-contractors you have paid at least $600 in rents, services, prizes and awards, or other income payments in the course of your business in a given tax year. Vendors and sub-contractors are essentially any person or company that is not your employee and that you have paid for services.

There are two additional forms that you must take into account when reporting non employee compensation to the IRS. They are the 1099-K and the 1099-NEC. Here we will explain what each form is used for and where you can find the data in your AvidXchange portal to complete these for your suppliers.

Downloading The Report

You can download the ‘1099 Yearly AvidPay Summary Report by Company and Vendor’ report out of AvidXchange Strongroom. 

Instructions to Download Annual Detailed Reporting: 

  1. After logging into AvidXchange Strongroom, hover over the Reports tab and click on Reports.
  2. On the left sidebar, click on the 1099 hyperlink. 
  3. Click Run Report next to the 1099 Yearly AvidPay Summary Report by Company and Vendor
  4. Select your 1099 Tax Year as 2020 from the dropdown.  
  5. Click Run Report. Click Export to finish.  
  6. Make all further adjustments from the exported data manually in your accounting system.  

You can integrate the report data into Jenark.  Make adjustments to the exported data using Jenark provided instructions and integrate the report data into Jenark. 

Caliber & C3: The AvidXchange Strongroom engineer team can run an integration to import the 1099 data automatically into your accounting systems  

You will receive email communication from our Marketing team, including instructions for executing an Annual Detailed Report to help you process your 1099s. The reports are going to be available in your AvidXchange Strongroom portal on Tuesday, January 12, 2021. 

1099-MISC

File Form 1099-MISC for each person to whom you have paid during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Medical and health care payments.
    • Crop insurance proceeds.
    • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
    • Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
    • Payments to an attorney.
    • Any fishing boat proceeds.

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

AvidXchange DOES NOT send 1099-MISC Forms to your Suppliers.
1099-K

Form 1099-K, Payment Card and Third Party Network Transactions, is an IRS information return used to report certain payment transactions to improve voluntary tax compliance.  Suppliers should receive Form 1099-K by January 31st if, in the prior calendar year, they received payments:

  • from payment card transactions (e.g., debit, credit or stored-value cards), and/or
  • in settlement of third-party payment network transactions above the minimum reporting thresholds of –
    • gross payments that exceed $20,000, AND
    • more than 200 such transactions

A Form 1099-K includes the gross amount of all reportable payment transactions.  Suppliers will receive a Form 1099-K from each payment settlement entity from which they received payments in settlement of reportable payment transactions.  A reportable payment transaction is defined as a payment card transaction or a third party network transaction.

AvidXchange DOES NOT send 1099-K forms to your suppliers. They will receive them from their payment settlement entity, such as a bank.
1099-NEC

This tax season millions of independent workers will receive Form 1099-NEC in the mail for the first time. The 1099-NEC is the new form to report nonemployee compensation—that is, pay from independent contractor jobs (also sometimes referred to as self-employment income).

Form 1099–NEC, Nonemployee Compensation, is a form that solely reports nonemployee compensation. Form 1099–NEC is not a replacement for Form 1099-MISC. Form 1099–NEC is only replacing the use of Form 1099-MISC for reporting independent contractor payments.

If your business hired a contractor and paid them more than $600 in a year, it’s your responsibility to file a Form 1099–NEC with the IRS and send a copy to the contractor.

AvidXchange DOES NOT send 1099-NEC forms to your suppliers.
Frequently Asked Questions

I need a W-9 from AvidXchange in order to pay for the services rendered. How can I get one?

You can download AvidXchange’s W-9 by clicking this link.

What are the rules for 1099?

Businesses must issue a form 1099-MISC to each person to whom they have paid at least $600 in rents, services (including parts and materials), prizes and awards or other income payments.

What is Non-Employee Compensation?

Per the IRS, if the following four conditions are met, you must generally report a payment as non-employee compensation:

  1. You made the payment to someone who is not your employee
  2. You made the payment for services in the course of your trade or business (including government agencies and non-profit organizations.
  3. You made the payment to an individual, partnership, estate, or in some cases, a corporation; and
  4. You made payments to the employee of at least $600 during the course of the year

What are the differences between Form 1099-MISC and Form 1099-NEC?

Form 1099-MISC and the Form 1099-NEC are tax information returns the IRS requires for reporting compensation to individuals or unincorporated businesses to whom you have issued $600 or more in rents or compensation.

Starting in 2020, you will use Form 1099-NEC to report non-employee compensation, which was previously noted in box 7 of Form 1099-MISC. The IRS implemented a separate 1099 form since the NEC reporting deadline is January 31, whereas other items reported on a 1099-MISC are not due until the end of February.

When are the 1099-MISC and 1099-NEC forms due?

Form 1099-NEC must be filed with the IRS by January 31 (if that date falls on a weekend, the deadline is the following first business day). In addition, recipient copies must be postmarked by January 31. Note: If that January 31 falls on a weekend, the deadline is the following first business day.

All others 1099 forms are due by February 28 if filed by paper, or March 31 if filed electronically (or the following first business day if the deadline date falls on a weekend). Penalties for late filing range from $30 – $100/form; penalties for intentionally disregarding the requirement are $250/form.

Do credit card payments to 1099 vendors need to be tracked for income?

You are not required to send a 1099-MISC or a 1099-NEC if you paid any contractor via credit card (PayPal, etc.), even if you paid the recipient more than $600 last year. In the case of electronic payments (credit card payments), the payment processor will handle any required reporting. FYI – Those payment processors are required under certain circumstances to send out a different version of the 1099, called a 1099-K.

How can I make the 1099 process easier at year end?

  1. Collect W-9s up front from any vendor you expect to pay more than $600.
  2. When doing monthly bookkeeping, make sure to record the vendor name in the payee line.
  3. Pay with a credit card if possible.

Does AvidXchange send 1099 forms to Suppliers?

AvidXchange does not send 1099 forms to suppliers. Our customers can obtain payment information by running the 1099 Yearly AvidPay Summary Report by Company and Vendor.