Setting Up Vendors for 1099 Reporting in QuickBooks Desktop

Vendors 1099 Reporting

Written by Corenne Gutierrez

January 21, 2021

New for 2020: The IRS has separated nonemployee compensation onto a new form called the 1099-NEC.

If you need to file both the 1099-NEC and the 1099-MISC for the same vendor, you will need to create a new general ledger expense account for the vendors that will be reported on the 1099-NEC. A single account can only be used for each form. Once you have set up your new general ledger expense account in your QuickBooks file, you can edit the vendor payments to move them from one general ledger account to another.

Steps to Set Up 1099s in QuickBooks

Turn on the 1099 feature:

  • Open QuickBooks Desktop, go to Edit tab and select Preferences
  • Select Tax:1099
  • Choose Company Preferences tab
  • Click Yes to filing 1099-MISC forms option
  • Select Ok to save the settings.

Make sure your vendors are set up properly:

  • Find your 1099 eligible vendors in the Vendor Center and double click them to edit. Verify the names and addresses are correct. Click on the Tax Settings tab and verify the tax ID is correct and check the box that they are eligible for 1099s.
  • All eligible 1099 vendors should complete IRS Form W-9 (Request for Taxpayer ID) when engaged for services. If you do not have a vendor ID number, have them complete this form as soon as possible. If the vendor refuses to provide their ID number, you should deduct backup withholding from the payments you make to them.

Set up your expense accounts in QuickBooks:

  • Click Vendors on the top menu bar
  • Select Print/E-file 1099s
  • Click 1099 Wizard
  • Review the vendor names and check the box to create the form, click Continue
  • Verify the vendor information, click Continue
  • Click on the drop-down menu on the right from Show 1099 accounts to Show all accounts
  • Select the correct 1099 box to apply the expenses, click Continue
  • Review the payments selected, click Continue
  • Click Summary Report or Detail Report at the Confirm your 1099 entries window, click Continue (or click on Reports, Vendors &
  • Payables, 1099 Summary)
  • If you are satisfied with the 1099s, you can Print 1099s (you must have pre-printed forms) or Go to 1099 E-File Service (additional fees apply)

Please contact us if you have any questions or would like Hawkins Ash CPAs to prepare your 2020 Form 1099s for you.

Author: Julie Schowalter

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Corenne Gutierrez
I joined Hawkins Ash CPAs in 2011. As the Firm's marketing manager, I develop and deploy strategic marketing and communications plans to fulfill the marketing goals of the Firm as a whole, each office and business line.

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