Before preparing your year-end tax forms, be aware of a new Business Central feature called Enable using 1099 Forms to Transmit Tax Data to the IRS in the US. This preview feature was introduced in the 2025 Release Wave 2 and supports electronic delivery of 1099 forms to vendors and preparation of electronic filing data for the IRS. Key considerations:

• The feature is disabled by default unless manually enabled.
• Once enabled, it cannot be turned off.
• It applies to all companies within the Business Central environment.
• Organizations should test the feature in a sandbox environment before enabling it in production.

For the 2024 tax year, users who have not enabled this feature can continue using the same 1099 process as previous years.

Using Avalara for 1099 filing

In addition to traditional pre-printed forms, organizations may consider Avalara 1099 & W-9 for electronic filing. Features include:

• IRS e-filing
• Electronic delivery to recipients
• State filing support
• TIN matching services
• PDF generation for recipients without email addresses
• CSV and API import options

Vendor setup requirements

Accurate vendor setup is critical for successful 1099 reporting. Each 1099 vendor should have:

• A 1099 form box assigned
• A federal ID number or Social Security Number
• A tax identification type

Tax identification types include:

• Legal Entity
• Natural Person

As transactions are entered throughout the year, Business Central automatically tracks 1099 amounts for properly configured vendors.

Configuring 1099 form boxes

Business Central uses 1099 form boxes to categorize reportable payments.

Examples include:

• 1099-NEC
• Other available IRS reporting categories

These form boxes are assigned on the Vendor Card and determine how transactions are reported at year end.

Reviewing 1099 information

To review reportable amounts:

1. Open the desired 1099 Form Box.
2. Select the vendor 1099 reporting options.
3. Apply date filters and vendor filters as needed.
4. Export or print the report in the preferred format.

This allows organizations to verify reportable amounts before finalizing tax forms.

Adjusting 1099 amounts

If corrections are needed, adjustments can be entered directly within the 1099 form box setup. Common reasons for adjustments include:

• Correcting discrepancies
• Entering transactions from a prior accounting system
• Including payments made before Business Central implementation

Adjustments update the reportable amount associated with the vendor and reporting category.

Printing 1099 forms

To generate 1099 forms:

1. Open the appropriate 1099 Form Box.
2. Select the reporting option for the desired tax year.
3. Generate a PDF or print version.
4. Review the information for accuracy before distribution.

The generated form includes:

• Company information
• Vendor information
• Tax form details
• Reportable payment amounts

Creating and printing 1096 forms

Business Central also supports the creation of Form 1096. Before using this feature:

1. Open Feature Management.
2. Search for 1096.
3. Enable the required feature.

To create a 1096 form:

1. Open the 1096 Forms page.
2. Select Create Forms.
3. Choose the reporting period.
4. Replace any existing data if appropriate.
5. Review the generated information.
6. Select Release before printing.

The Release step is required before the form can be printed.

Electronic filing considerations

Electronic filing is generally completed through the IRS FIRE system or a third-party filing service. Organizations should:

• Export data in the required format
• Follow IRS filing requirements
• Review Business Central documentation for their version
• Verify any customizations or add-ons that may affect filing

If electronic delivery is configured, forms can also be sent directly from Business Central via email.

Best practices

Before filing:

• Review all vendor information for accuracy.
• Verify payment totals and form assignments.
• Confirm adjustments are correct.
• Validate both 1099 and 1096 forms.
• Retain copies of all submitted forms and reports for audit and recordkeeping purposes.

Key takeaway

Business Central streamlines 1099 reporting by automatically tracking reportable payments, generating tax forms, supporting adjustments, and assisting with filing preparation. Proper vendor setup and careful review throughout the process help ensure accurate, compliant year-end tax reporting.