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Year End Tips — Form 1099 for Vendors

1099

We are quickly approaching the end of the year. For the next few months, I will be furnishing you with tips on how to make the end of year run as smoothly as possible. A few minutes spent now can save some frustration in the “crunch time.”

This tip is for the preparation of 1099’s. Form 1099 is an informational return required by the IRS. If you have outside consultants or sub-contractors that you pay, you are required to furnish them with a Form 1099.

There is a two-step process in QuickBooks for setting up your Vendor to receive a Form 1099.

  1. First, you must set-up a Vendor and designate that Vendor as a 1099 Vendor. You set up a new Vendor in the Vendor Center and make the Form 1099 designation at the bottom of the Additional Info Tab. You must also enter the Vendor’s tax ID number in the appropriate box. The ID number can be a social security number or a Federal Employer ID number. Then click on the Vendor Eligible for 1099 box.
  2. The second step is to specify the expense account that will be used to post payments to 1099 vendors. This is accomplished by selecting Preferences from the Edit menu. Then click on the Tax:1099 item and Company Preferences tab. Answer, “Yes” to “Do you file 1099-Misc forms?” Then select an account that corresponds to the appropriate 1099 Category.

If your Vendor information is set up correctly, you are able to prepare 1099 forms at the end of year without a problem. Select Print 1099’s/1096 from the Vendor menu and follow the on-screen step-by-step instructions for reviewing and printing your forms. Form 1096, a summary total of all 1099’s, must also be printed and sent to the IRS along with the 1099’s.

Lately, taxpayers have been required to provide a Form 1099 to contractors whom they pay at least $600 per year. However, for the latest information on IRS filing requirements, contact the IRS at:

  • Telephone Assistance: 800-829-4933
  • IRS Web Site: http://www.irs.gov
  • EFTPS Web Site: https://www.eftps.com/eftps/
  • Local IRS Office Locations: http://www.irs.gov/locations/index.html

Written by admin · Filed Under Conquering QuickBooks 

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