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.