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How to Create and File 1099s with QuickBooks Desktop

If the contractor is deemed invalid because you don’t have the proper documentation they will reclassify the contractor payments as W-2 wages and you will owe back taxes. Of course, as with anything, there are exceptions. One thing most business owners don’t know is that if you pay a contractor with a debit card, credit card, or Paypal the 1099 is issued by the merchant processor.

You’ll notice you can change the tax year as well as the type of contractors. We recommend filtering this list on all three “type of contractors” options. This will allow you to check for any contractors who were not marked to receive 1099s and any payments that should be included on the 1099 but aren’t. Your clients can invite their contractors to complete W-9s or provide bank deposit details online.

QuickBooks Desktop has a great time-saving feature to help you prepare your 1099s from the info you already have in your accounts. Learn how to prepare and file your federal 1099s with QuickBooks Desktop or QuickBooks Desktop for Mac. Now make sure that ‘Critical Fixes‘ is selected at the end of the listing of updates and click ‘Get Updates‘.

Ufuoma Ogaga is the CEO of Goshen Accounting Services, which focuses on providing accounting, payroll, and advisory services to nonprofit organizations. The first time you run this report you will receive a blank page. Let’s go through the process of setting up the 1099 preferences. I will be using the sample Craig’s Landscaping and Design company file. Form 1099-NEC instead of in Box 7 of 1099-MISC. This change was made to alleviate some of the confusion surrounding the due dates for the different types of payments reported on 1099-MISC.

The employer and employee relationship involves a contract, whether an employment contract or benefits like vacation, 401k contributions, insurance, etc. The employer must process and file 1099s for all persons deemed as independent contractors. An employee classification depends on the degree of control that the employer has over the worker. An independent contractor decides when and how they work. They also dictate the payment for services and don’t require expenses to be reimbursed.

First, review the vendors in the vendor center, edit the vendor and mark the box Track Payments for 1099. Additionally, QuickBooks® Online 1099 wizard will give you the opportunity of electing NOT TO SEND a QuickBooks® 1099 form. Go to Reports, Vendors & Payables, then 1099 Summary or 1099 Detail. This report should contain all the vendors that you have setup for 1099s that are eligible and have met the IRS threshold. You will see the amounts listed for each vendor as you highlight them, and also the method of payment.

Verify all the information related to the contractor or vendor is correct. You don’t need to 1099 report electronic transactions because the bank will do that automatically. Liz Scott recently wrote an outstanding article—Getting Started with 1099s in QuickBooks Online—in her “QBO Monday Minute” series, which explains your options for 1099 filing.

Create and file your federal 1099s with QuickBooks Desktop in minutes. You have to file the tax forms with the IRS whenever you pay using direct deposit, www.wellcare.com.flex cash, or check to the contractors. If you need to file both a 1099-NEC and a 1099-MISC, you may need to adjust your account and contractor payments.

We offer our toolkit of financial intelligence that will be your greatest asset for business growth. On the next page, review your contractors, the amount you paid them, and the category for each. When entering the vendor, add the full name, address, city, state, zip code, and email. You can also enter a phone number, billing rate, terms, and more. On the bottom right side of the screen, you will see a field to enter the Business ID or Social Security Number.

Repeat the steps if you wish to create and file the 1099-MISC. Follow the on-screen instructions to import tax data prepared in QuickBooks Desktop. Select the account to link with a particular payment.