Preparing 1099-Misc in QuickBooks

As we come to the end of another year, we are reminded that annual reporting requirements are just around the corner. To ease your reporting burden, QuickBooks has a feature that will allow you to run a report that will list the eligible vendors and the amounts to report on the 1099-Misc. A bit of set up is required, however.

First, you will need to turn on the 1099 feature.

• Click Edit on the top menu bar> Preferences
• Click on Tax:1099 at the bottom of the window
• Choose Company Preferences and select Yes for filing 1099’s
• Click OK to save preferences

Next, you will need to make sure your vendors are set up properly. Find your 1099 eligible vendors in the Vendor Center and double click them to enter the editing function. Verify the names are correct and addresses are entered as well as their tax ID found under the Tax Settings tab. Check the box that they are eligible for 1099s.

All eligible 1099 vendors should have been given an IRS Form W-9 (Request for Taxpayer ID) when engaged for services. If you do not have the vendor ID number, send them a W-9 as soon as possible and enter the information into QuickBooks.

The final task is to set up your expense accounts so QuickBooks knows which accounts to search for eligible expenses.

• Click Edit on the top menu bar> Preferences
• Click on the Tax:1099 tab
• Choose Company Preferences and click the link to map your accounts to boxes on 1099s
• From the drop down, select Show all Accounts
• You can then review your accounts and select the correct 1099 box to apply the expenses to. For example, a Subcontractor expense would be linked to Box 7, Nonemployee Compensation, whereas a Rent expense would be linked to Box 1, Rent.
• When done, select Save and close.

If you are doing your own 1099’s, you can use the 1099 Wizard under the Vendor menu. If Hawkins Ash will be doing your 1099’s, you can print out a report by going to Reports > Vendors & Payables > 1099 Summary. This report will have all the information needed for 1099 preparation, as long as you have completed the above steps correctly.

If you are unsure which vendors should receive 1099’s, please call us as the penalties for not issuing a 1099 have increased to $250 per form.

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