USDA's Farm Service Agency has changed the policy on issuing 1099s and the information this income tax-related document contains. These changes have gone into effect for the 2012 calendar year. Like all other businesses, 1099s for farming operations must be issued by Jan. 31, 2013.
Beth Grabau, information and outreach specialist with the Iowa FSA office in Des Moines, provides the following answers to some often asked questions on this topic. She explains how you can find your information online and explains some of the USDA online services available. For more details and answers to questions contact your local FSA office or go to www.fsa.usda.gov/ia.
QUESTION: I've heard about changes FSA is making to the 1099, who will these changes affect?
Answer: In past years, Internal Revenue Service Forms 1099-G were issued to show all program payments received from the FSA, regardless of the amount. For calendar year 2012, the 1099-G reporting will change.
IRS Form 1099-G (Report of Payments to Producers) will only be issued to producers whose reportable payments total $600 or more for the calendar year. Additionally, if the producer has at least $600 in reportable payments received from multiple FSA offices, only one Form 1099-G will be issued. Producers subject to voluntary withholding or backup (involuntary) withholding will receive the appropriate IRS form, even if combined payments are less than $600. The same changes will apply to producers and vendors who normally receive IRS Form 1099-MISC from FSA.
Any producer who receives less than $600 in combined payments should consult a tax adviser to determine if these payments must be reported on their tax return.
QUESTION: My tax appointment is generally before the 1099s come out. I try to keep track of my payment transaction statements and receipts for loan repayments for my accountant, but I worry about missing one. If more than one payment is issued on one day, the total dollar amount is listed as one entry at the bank, also causing confusion. What is available to assist me?
Answer: All of this information is available online to producers who have signed up for e-Authentication, or e-Auth. Producers who have and use USDA's e-Auth can generate reports for current and historical financial information. Information available on the financial website includes:
* Payments, providing a summary along with detailed information on payments made by FSA to you;
* Collections, showing collections received from you or on your behalf including the program the collection was for and the amount;
* Debt, which shows the outstanding principal owed;
* CCC-1099-G, showing the information reported to IRS;
* Customer Account Inquiry, a report providing a comprehensive list of financial activity for a selected period of time. Detailed information may be obtained through use of links provided in the inquiry. Reports have payments broken down by farm numbers and by county, which could be helpful to multi-county producers.~~~PAGE_BREAK_HERE~~~
Using this site, producers can also enter their own assignment of a payment to a third party, enter joint payment information to have a program payment made to yourself and a third party, as well as updating direct deposit information. USDA's e-Auth also allows producers to do other activities online such as signing up for the DCP program.
QUESTION: What are the steps for signing up for e-Auth?
Answer: Access to the Financial Services website and other online services are available after a producer has signed up for an e-Authentication Level 2 account. Producers may sign up for an e-Authentication Level 2 account on the www.eauth.egov.usda.gov website.
First producers will obtain a Level 2 account by completing a customer profile and submitting it online. After submitting the customer profile, producers will receive a confirmation email and must respond to it within seven days to activate their account. Then you must complete the "Identity Proofing" process by visiting your local FSA office and presenting a photo ID, such as your driver's license. During this visit the local FSA office goes online to complete the final steps to have access to this account.
QUESTION: I've been getting fewer paper copies of newsletters from my local FSA office. They tell me they are unable to send paper copies due to budget constraints and cost saving measures. I try to keep up with USDA farm program information. Besides the website, is there another source of program information?
Answer: FSA, like many other organizations, is trying to work smarter and be more efficient. Moving to electronic notifications via email helps conserve resources and save taxpayer dollars.
Many local FSA offices are moving toward a paperless news distribution system. Producers in counties that are using this delivery system are being asked to enroll in the new GovDelivery system, which provides notices, newsletters and electronic reminders instead of a hard copy through the mail. GovDelivery is open to anyone interested in subscribing and receiving FSA program information.
Subscribing to receive electronic information is done by going to www.fsa.usda.gov/subscribe. After entering a valid email address, scroll to the applicable state or states. By expanding the state, you can choose to receive information from any state and any county or counties. You can select as many subscriber options as you want. This delivery system allows people who farm in multiple counties or across state lines to receive FSA updates from each county in which they operate or have an interest.
Options also include receiving press releases and other program information online. After making all of the selections requested, hit submit. Modifications to this request can be made at any time by going back into this website or by clicking the link at the bottom of each GovDelivery message. Remember to update email addresses when they are changed.