1099 Income Calculation Examples
The following examples illustrate 1099 income calculation.
Example 1
| 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.
Example 2
| 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.