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1099 Misc Withholding tax calculation for AP invoices

Hi All:

When we post AP invoices from MIRO, the withholding tax base amount is being calculated as the amount in the " Amount " field only. If there is dollar amount in " Tax amount" field . It is not being added to the withholding base amount sum. Is there any configuration which will allow me to calculate the withholding base amount as the sum of "Amount" and "Tax amount" field.

Example:

Amount : $1000

tax amount : $100

Withholding tax base amount is being calculated as $1000 instead of $1100 since the vendor is being paid $1100.

Any help would be deeply appreciated.

Thanks,

Kunal

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  • Best Answer
    Posted on Jan 08, 2014 at 02:19 AM

    Hi Kunal,

    This is the Standard accepted behavior . 1099 Vendor should be paid net of tax. Although you can change this setting

    Financial Accounting Basic Settings (New)<Withholding Tax<Extended Withholding Tax<Calculation<Define Withholding Tax Type for Payment Posting

    Click on FE

    Change base amount from Net to Gross Amount.

    and post a new invoice and clear the amount

    Regards

    Veenu

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