2023 Tax Reporting: Instructions for Preparing Forms 1099-MISC and 1099-NEC

[sareid]

It looks like the official notice has some instructions for Wards/Branch Clerks, as well as Stake/District Clerks.

#1 I wish there were screenshots that helped to provide some of the steps.

"Ward or Branch Clerk

By the end of 2023, give the stake or district clerk the following information
about all those (other than the exceptions listed above) who received payments for
rent, royalties, or services, regardless of the amount:

-Name (as listed with the Social Security or employer identification number)
-Address
-Social Security number or employer identification number
-Total amount paid during the year

In Leader and Clerk Resources, go to the Expense Summary Screen. Select
Expenses by Payee and sort alphabetically. Disregard fast offering payments and
Church member reimbursements. Identify payments to individuals and nonincorporated entities for services."

Does anyone have a screenshot of some of this screen header? I am not seeing a link or text for "Expenses by Payee"

I am trying to understand this a little better to help disseminate this to other clerks.


#2 Example Scenarios of what to report

The letter specifies that reporting is not required for payments to certain categories, including vendors providing products, legally incorporated entities, tax-exempt entities, fast-offering recipients, utility companies, other Church units, and Family Services. Disregard fast offering payments and church member reimbursements. Scenarios that would typically require reporting include payments to individuals or non-incorporated entities for services, rent, royalties, or other reportable activities.

I'm trying to think of some examples of this where reporting is needed.

Would rental of a storage unit that was paid by a member require reporting?

[eblood66]

I'm trying to think of some examples of this where reporting is needed.

Would rental of a storage unit that was paid by a member require reporting?

No. Anything that is paid by a member and then reimbursed does not need to be reported. On the other hand, if the ward paid the storage company directly and the the company is not incorporated and the total is over the reporting limit, then it would be reportable.

An example I've had in the past is rental costs for a camp site for stake youth camp where the owner of the site was an LLC. On the other hand, our camp last year was at a camp owned by a university (which is incorporated) so it wasn't reportable.

Another example I had a few years ago was for a Nauvoo youth trip. We paid certain hotels directly for rooms for the trip. Although most hotel chains are incorporated, each hotel is often owned by a sole proprietor or LLC. In those cases the room payments were reportable. On the other hand, our stake YM president paid for one hotel personally and we reimbursed. That one was not reportable.

If in doubt, contact the church's tax administration department. I verified several of the above cases with them.

[jgoggan]

We also got the normal email from the Church about 1099s, of course. What I found interesting is that they gave these instructions for checking on this (which you listed above):

"In LCR, go to the Expense Summary Screen. Select Expenses by Payee and sort alphabetically."

Does anyone see that option? We have no option to "Select Expenses by Payee" from the Expense Summary Screen (or anywhere else I can find).

Just seems odd that that is the official instruction from the Church if clerks can't actually generate that report? Are we overlooking something?

In the past, we've always had to do some manual searching for these to make sure we didn't have any that qualify.

Our Stake clerk let us know that in the last 10 years, they've only ever had TWO that actually needed a 1099. One was an event where we had to rent port-a-potties and the total was over $600, for example.

But I still like to check to make sure. I can do it manually like usual, but just found it really odd that the official instructions don't actually appear to work -- at least not at the ward clerk level that I can find so far...

[kd7mha]

In the finance section select the expenses menu then select the Expenses summary tab
you can then select the column heading to sort

[eblood66]

Does anyone see that option? We have no option to "Select Expenses by Payee" from the Expense Summary Screen (or anywhere else I can find).

As kd7mha pointed out, you just click on the Payee column header. There is no option labeled "Expenses by Payee". Their instructions could definitely be better.

Our Stake clerk let us know that in the last 10 years, they've only ever had TWO that actually needed a 1099. One was an event where we had to rent port-a-potties and the total was over $600, for example.

It is very uncommon. As a clerk of various kinds over the last 16-17 years I've never seen one for any ward expense. As a stake clerk, I've only have a very small handful--generally for facilities for camp or youth conference.

[jgoggan]

In the finance section select the expenses menu then select the Expenses summary tab
you can then select the column heading to sort

Yes, this is the way we do it now, but it is far from optimal. You have to manually total up any qualifying payments, for example.

Apparently, the old MLS app actually had the "Expenses by Payee" report that they are referring to. It totaled things up for each Payee. Which made it very easy to take a quick look and go "Ok, nothing over $600, so nothing to even have to double-check" and then you could quickly double-check any that did total over $600 to see if enough were reportable to matter.

Again, my main "complaint" is that the instructions that they are sending out to all clerks tells them to do something that doesn't exist. (And then what you actually have to do (manually total up qualifying expenses for each Payee) might not be obvious to clerks who aren't used to this.)

It seems it would be fairly trivial to make a "Expenses by Payee" report for this -- which ignores fast offerings -- and gives a total for each Payee. It would make it a very quick process. (And, based on their instructions, that is their intent -- the report simply doesn't seem to exist for some reason.)

It kinda makes me wonder if this report exists at some higher level and we just don't have access. I asked our Stake and they don't have that option/report either. But just seems so weird to me that someone is writing up instructions tell people to go to an option that doesn't exist. Seems more likely that it exists at their level of access and they just didn't realize that it doesn't exist for others...

[eblood66]

Yes, this is the way we do it now, but it is far from optimal. You have to manually total up any qualifying payments, for example.

No argument that it would be nice if there was a report with amounts summed up by payee.

But in practice, I don't find it hard to manage the way it is (and I'm at the stake level--I go through this for each ward to make sure there aren't any I need to worry about and it still doesn't take long). The first key is that reimbursements to members don't need to be reported. That means that you only need to look at checks. You can filter by expense type to do that. Nowadays that removes most expenses for my units. The next key is that fast offering expenses are not reportable. So I can also skip any check that I can tell is either a payment to a member or is in a fast offering category. The remaining payees is usually only a small handful and I almost never see two payments in this group to the same payee so I can just scan the amounts without having to sum.

Of course, it would be nice if the instructions pointed all of this out since it's not necessarily obvious unless you think it through carefully

[jgoggan]

No argument that it would be nice if there was a report with amounts summed up by payee.

Agreed. And, again, my main point was that the instructions imply (ok, MORE than imply -- they specifically state) that such a report seems to exist.

But in practice, I don't find it hard to manage the way it is (and I'm at the stake level--I go through this for each ward to make sure there aren't any I need to worry about and it still doesn't take long). The first key is that reimbursements to members don't need to be reported. That means that you only need to look at checks. You can filter by expense type to do that. Nowadays that removes most expenses for my units. The next key is that fast offering expenses are not reportable. So I can also skip any check that I can tell is either a payment to a member or is in a fast offering category.

I actually filter and show only things from Budget so that those Fast Offering ones don't even show. Easier than skipping over payments manually.

The remaining payees is usually only a small handful and I almost never see two payments in this group to the same payee so I can just scan the amounts without having to sum.

That sounds great for you. I just did it for our small ward (~100 people on Sunday) and have two pages of them. And one person has 11 payments, for example. So not everyone is like yours, I guess.

Of course, it would be nice if the instructions pointed all of this out since it's not necessarily obvious unless you think it through carefully

Well, more than that, it would be nice if the instructions didn't tell you to do something that isn't possible. Again, that was my point here.

I still maintain that I think this could be very confusing for newer clerks that haven't had to do it before. I've been doing it for years. Back from the MLS days too. I just get a little frustrated when we get something official that says "Here's what you need to do..." followed by instructions that don't work. We have a brand new financial clerk in our ward. I was helping him with this and thought maybe it was best to go through the official instructions with him instead of just telling him how I usually do it -- because, well, I can admit that I often have something to learn. But doing that only led to me having to explain that the official instructions are simply wrong. And then I showed him how to do it manually.

We then had a quick discussion about how sometimes I'm not sure whoever does the official finance stuff has actually been a clerk (which would explain why the new deposit envelopes are so poorly designed).

[eblood66]

The remaining payees is usually only a small handful and I almost never see two payments in this group to the same payee so I can just scan the amounts without having to sum.

That sounds great for you. I just did it for our small ward (~100 people on Sunday) and have two pages of them. And one person has 11 payments, for example. So not everyone is like yours, I guess.

Wow. None of the units I've been a clerk in or over have ever had that many budget payments that aren't reimbursements to members. Of course, another factor is that payments for goods aren't reportable so unless you're paying that person for a rental or service, you don't need to add them up either.

[jgoggan]

Sorry for the confusion. I'm not saying they are reportable events -- so, yes, I don't have to total them. Most of them were reimbursements which do not qualify.

My point for that part was simply that there are a lot of them to go through. For me, I know right off which are reimbursements based on the member and such. But I was again referring to our new clerk -- who has no idea who most of these people are or what their payments are for. They'd have to go through each one to see as it isn't always obvious from the Purpose description.

In any case, the official instructions are incorrect and it would be nice if that report actually existed. That's all I'm really saying here.