1099 Process for Processing and Commissions Team

This guide outlines the steps the Processing Team must follow to prepare, audit, and finalize 1099.

1. Before year-end, ensure all necessary data for 1099 preparation is complete. Generate the 1099 Person Data Review report to verify the following:

a. Tax ID – Confirm that the correct Tax ID is entered in Darwin. If payments are made to an agent’s LLC, use the Business Tax ID. Verify that the format is accurate.

b. 1099 Type – Ensure the correct 1099 type is selected.

c. Address – Confirm we have the Agent’s address in darwin

2. Once all the closings for the year have been processed, generate the Daily Closings Report. Make sure to set the date type to Closing Date and manually calculate the 1099. The formula is: AGCI – Franchise Fee – Co $ – Deduct 1 – Deduct 2 = 1099 Amount.

3. Generate the 1099 Data Export Report and compare the 1099 amounts with those in the Daily Closings Report. Identify any discrepancies and consult with Marni to resolve them. Pay special attention to the following:

a. Lisette Turner’s 1099 – Ensure it includes both her income and the Berryville Team’s override.

b. Deductions – Confirm that Deduct 1 and Deduct 2 are included.

c. Agents Switching from Individual to LLC – Create separate 1099 forms: one for individual income and another for LLC income. Use the ACH Info Updates to verify the switch dates.

d. Agents Forming Teams – For agents who recently transitioned to a team structure, verify whether they are being paid individually or as a team under their LLC. If they are being paid as a team through their LLC, generate separate 1099 forms: one for individual income and another for team income under the LLC.

e. Review the Husband-and-Wife Teams and determine which teams should receive a combined 1099 under their LLC.

f. Overrides – Most discrepancies are due to overrides. These are typically excluded from the Closings by Agent Report but are included in the 1099 Report.

g. Christie Armani’s Builder Listing – Payments for her builder listing will appear in the 1099 Report but not in the Closings by Agent Report. It has to be included on her 1099.

Ensure all discrepancies are thoroughly reviewed and addressed.

4. Launch the Campaign Email for the 1099 so the agents can review their income and address and request for corrections if needed. They have until the 19th of January to reply. Review and address any discrepancies that they will raise.

5. Generate the final 1099 using the 1099 Data Export and transfer the data to the NEC Import Template. Make sure to create a separate tab for Stafford Agents. Submit the 1099 Spreadsheet to Accounting for Filing. Accounting will then provide the 1099 copies to Marni.

6. When the 1099 copies are received, they are in 1 combined PDF File. Processing needs to break apart the 1099 and name each as 1099 NEC – YYYY.

7.  Prepare the 1099 Detailed Breakdown using the Daily Closings. Make sure to add the Recruiting Bonus/Overrides. Name the document: 1099 Back up/Detailed Breakdown YYYY

8. Upload the 1099 NEC and the 1099 Detailed Breakdown to the Agent Masterfile.

9. Accounting will mail the 1099 to the Agent’s mailing address.