By Amanda Karen | CrunchSum
Follow the steps below to quickly complete the task of preparing your vendor 1099-MISC forms in QuickBooks Online.
Step 1: Mark Vendors as 1099 in QBO
For all vendor payments that should be tracked for 1099 purposes, make sure that the “Track payments for 1099” box is selected in the Vendor Information screen. Vendors > Select vendor > Edit > Select “Track Payments for 1099”. For help determining what vendors should be tracked for 1099 reference this IRS resource.
Step 2: Update all 1099 vendor information
1099 MISC forms require the following vendor information: Vendor Name, Address, and Tax ID. The best way to obtain this information from your vendors is to request that they provide you a completed W9 form, which is an informational form that will provide all of this information. QuickBooks Online will let you know if any vendors have information missing.
Step 3: Start preparing your 1099s
Vendors > Prepare 1099s
You can also add/update vendors to track payments for 1099 by clicking the Select Vendors button.
Step 4: Assign accounts
You will need to assign the appropriate income account and corresponding expense account. The income account chosen will specify the income box that all 1099 payments will appear in on the printed 1099-MISC form(s). For help on determining which income account is the most appropriate click on the “Help me assign boxes.” link. The expense account(s) chosen should be the account(s) that you already use to track vendor 1099 payments to in QuickBooks Online.
In the example below all vendor 1099 payments will print to the Other Income box on the 1099-MISC form(s). The Contract Labor expense account is assigned because all 1099 vendor payments are recorded to this expense account. Linking the income and expense account ensures that all vendor 1099 payments are being included. It is possible to assign more than one account.
To assign more than one account, click on the dropdown arrow, then selecting “Select Multiple…” will allow you to map to more than one QuickBooks Online account.
Click “Add” to include multiple accounts in the 1099 income box.
Step 5: Preview your information
Confirm that all 1099 vendors are listed under the Preview Information section of the screen. Also confirm that all vendor information is complete and not missing. Any information that needs to be updated will be highlighted in red.
Step 6: Choose How To File With the IRS
You have the option to either file electronically or paper file. Note that paper filing requires you to purchase your own 1099 forms to print on. These can be purchased from your local office supply store (i.e. Office Max or Staples). Also, be aware that filing due dates vary depending on how you choose to file.
If you choose to paper file, follow the steps to print out all individual 1099 forms and a 1096 form for your business.
It is also important to note that you will likely need to play around with the printing alignment settings in order to get the data to print correctly within the respective boxes on the 1099-MISC and 1096 forms. First print a sample of both the 1099 and 1096 form to help determine if and what alignment adjustments need to be made, then print on the actual forms.
*None of the above constitutes legal tax advice, but serves only for informational purposes on how to prepare 1099s in QuickBooks Online.
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