IRS
Reporting
Form 1099-MISC
Raffles
Civil Air Patrol
2009 National Conference
Learning Lab FM02
Stacy Jackson
Introduction


Wing Responsibilities for 1099-MISC Reporting
1099-MISC
Prizes and Awards
 Rent and Royalty Payments
 Services
 Attorney Payments
 Scenarios for Volunteers




Raffles
Wrap Up
Questions
Wing Responsibilities

Be diligent with Accounts Payable postings. The
first step is having correct information.

Have only one vendor card for each vendor.

Your WFA can merge vendor cards if more than one card
exists for a vendor.
Verify that transactions posted are accurate.
 Indicate 1099 Eligible Vendors in QuickBooks

Done by editing the vendor and checking the 1099 option
under the “Additional Info” tab.
 Add the vendor Taxpayer ID information to QuickBooks

Vendor Edit Screen
Enter
vendor Tax
ID from W9
here
Check this box
if vendor is
eligible for
1099
reporting
Wing Responsibilities

Decide which vendors should receive a 1099MISC

Obtain Form W-9 from vendors
The Form W-9 is used as a tool to obtain the necessary
information from vendors. It will help determine if
payments to vendors are reportable.
 A Form W-9 should be obtained from all vendors and
kept on file at wing headquarters.

W-9 Example
Vendor should
choose one
business type.
Vendor must
sign!
Vendor should
enter one TIN
number. This
number should
match their
annual tax
returns.
Wing Responsibilities


Determine the amount to be reported on each
1099-MISC
Provide all information needed to file your
1099-MISC Forms to your WFA. A spreadsheet
will be provided that will aid in consolidating the
information.
All information must be provided no later than Jan
15th for the preceding calendar year.
 NHQ will file all 1099-MISC Forms with the IRS,
state tax authority, and recipients

1099-MISC
 Required
 Prizes
for the following
and Awards
 Rent and Royalty Payments
 Services performed by individuals who are
not employees and are not incorporated
 Gross Proceeds paid to Attorneys
1099-MISC Example
All of the information for the
recipient must match their
annual income tax return
Prizes and Awards

Reportable amount:


Information needed:




$600 per calendar year
Individual’s name and address
Individual’s Social Security Number
Total amount of all prizes and awards paid to the individual
or on the individual’s behalf during the year
Example:

Flight scholarships or any cash awards to members

Scholarships are considered awards unless paid to a candidate to
attend an educational institution for a degree
Rent and Royalty Payments


Payments made to corporations and governments are
not required to be reported
Reportable amount:



Information needed:




$600 per calendar year for Rent
$10 per calendar year for Royalties
Name and address that the vendor uses to file their annual
tax return
Taxpayer Identification Number that the vendor uses to file
their annual tax return
Total amount of all rent or royalty payments paid to the
vendor during the year.
Example:

Hangar rental, office rental, or storage rental
Services


Payments made to corporations are not required to be
reported.
Reportable amount:


Information needed:




$600 per calendar year
Name and address that the vendor uses to file their annual
tax return
Taxpayer Identification Number that the vendor uses to file
their annual tax return
Total amount of all payments made for services to the
vendor during the year.
Example:

Catering, facility cleaning, lawn care, or pest control
Attorney Payments


Payments made to corporations must still be reported.
Reportable amount:
•

Information needed:
•
•
•

Reportable for any amount paid per calendar year
Name and address that the vendor uses to file their annual
tax return
Taxpayer Identification Number that the vendor uses to file
their annual tax return
Total amount of all payments made to the vendor during the
year
Example:
•
Retainers and legal fees paid to law firms
Scenarios for Volunteers

There are several instances when a 1099-MISC is
required to be sent to volunteers.
A volunteer receives a flight scholarship or activity
scholarship from a CAP entity.
 A volunteer receives a cash award from a CAP entity.
 A volunteer rents out hangar, office, or storage space
to a CAP entity.
 A volunteer provides cleaning or lawn care services
to a CAP entity and receives compensation.

Raffles


All raffles must be reported to NHQ/FM prior
to the raffle taking place.
All required information must be obtained by
the Wing or Unit.


IRS Form 5754 must be completed by each winner.
All prizes with a fair market value of $600 or
more must be reported to the IRS.

IRS Form W-2G
Raffles

All prizes with a fair market value of $5000 or more are
taxable.



Winner will pay 25% withholding tax on the fair market value
less the initial wager. This must be collected from the winner
when they collect the prize.
OR
Wing or Unit sponsor will pay 33.33% withholding tax on the
fair market value less the initial wager.
NHQ/FM will complete all IRS Forms and filing
requirements.

Taxes will be drafted from the Wing or Unit bank account
and submitted to the IRS
Form 5754 Example
All information
must
All information
be completed
must beby the
winner. by
completed
Part Ithe
= all
winners
winner.
Part II = only
taxable winners
W-2G Example
Some Final Notes

All forms must be filed with the same
information as the individual or business uses to
file their income taxes each year
Sole Proprietorships should be sent in the
individual’s name, not the business name
 Forms sent to individuals should contain their social
security number, not an employer identification
number.


All information should be reported by calendar
year, not fiscal year
Some Final Notes

The Wing is responsible for obtaining all
information via Form W-9 or Form 5754.

The IRS penalizes $50 per form for incorrect
information filed on 1099 Forms or W-2G Forms
that are not supported by the required back up.
If You Get Stuck or Need Help


Contact your Wing Financial Analyst
Contact National Headquarters

Stacy Jackson, WFA

[email protected]
877-227-9142, Ext. 427
Cell – 334-224-7657
Questions?