Want QuickBooks to Create Your 1099s?
It’s coming. January. The start of a new year and the beginning of the filing of numerous tax forms.
W2s and 1099s are usually the first required filings we tackle. Thankfully, if we have all the information on our vendors that we should, QuickBooks can make easy work of creating 1099 forms.
First, access the 1099 wizard by navigating to Vendors->Print/E-file 1099s->1099 Wizard.
QuickBooks will open the wizard to a welcome screen. Continue to the next step and you will be presented with a list of all your vendors. Select those that qualify as a 1099 vendor. Don’t worry about how much you spent with them, QuickBooks will figure that part out.
Once you have selected those vendors that may qualify, click Continue.
This step in the process lists only those vendors that you selected in the initial vendor screen. If there is missing information for a vendor, like no tax ID number, QuickBooks will highlight the field with the missing info. The red rectangle in the graphic is QuickBooks’, it wasn’t added later to call attention to it.
Any data you enter here, like a tax ID, will update the vendor record in QuickBooks when you complete the wizard or click Save & Close.
In the next screen, QuickBooks lists the accounts used for the vendors you selected as 1099 vendors. It wants to know if there are any accounts that should not be included and what box on the 1099 should be used for each.
Basically, Rock Castle Construction, the sample company, pays independent contractors to do certain jobs. These amounts should appear in box 7 of the 1099 MISC form. Another option would be box 1. That would be for a vendor to which we paid rent, like on an office or equipment yard. Rental income is reported separate from self-employed income.
There’s a screen that enables you to view a couple of reports, then QuickBooks gives a summary of the results based on the data we’ve entered.
Searching our transactions for the past year, QuickBooks finds two vendors that need a 1099. Middlefield Drywall for $1500 and Vu Contracting for $47,425.
The very next step is to create the 1099s. QuickBooks gives two options. Sending electronically involves additional fees. Printing is free. Be sure and get the forms, either purchasing at an office supply store or free from the IRS. The free ones from the IRS are a little tougher to manage in a printer, but work well where only a few forms are needed.
Some additional points –
Credit card charges are not included in 1099 totals. This is correct by law.
Debit card payments, or any payment that goes through a third party processor (Paypal would be another example) should not be included. We often create check forms in QuickBooks for these, but by using Debit, DBT, DCard, and a number of other abbreviations in the check number field, QuickBooks will know to exclude them from the total.
Only Vendor names can be used for 1099s. Don’t create names on the Other Names List in QuickBooks. It’s a source of many errors.