In this article, you’ll learn how to create and file 1099s with QuickBooks Desktop, which offers many time saving features to help users file payroll related taxes. The taxes can be created and filed directly from the software and by using the information already present in the software.
Users need to file 1099s for payment sent to contractors in cash, check, or direct deposit. There are two particular subtypes of 1099s:
- 1099 – MISC
Once you’ve filed the 1099s, you must mail a copy to each contractor, who require it for their own tax filing purposes.
Note: In this article, you’ll find information on how to create and file 1099s with QuickBooks Desktop. There is no information about doing the same with Intuit Online or QuickBooks Online.
Find the Shortcuts
- Step 1: What and When you need to Report
- Step 2: Setting up your 1099 Account
- Step 3: Update QuickBooks Desktop with Latest Release
- Step 4: Create your 1099s in QuickBooks Desktop
- Step 5: Import the Data into Tax1099
- Step 6: E-File the 1099 Tax Forms
- Step 7: Check Filing Status for 1099s
- Frequently Asked Questions about 1099s in QuickBooks Desktop
Step 1: What and When you need to Report
Who needs to File 1099 tax Forms?
If you pay contractors via cash, check, or direct deposit, then you need to file the 1099s. The 1099-NEC form is filed by all employers who’ve hired freelancers, contractors, or vendors.
Electronic payments like the ones made with credit/debit cards, gift cards, digital wallets, etc. aren’t included in the 1099s. You don’t need to report electronic transactions because the bank will do that automatically.
Note: The information reported in Box 7 of 1099-MISC is now reported on Box 1 of 1099-NEC.
If you’ve withheld federal income tax under the backup withholding rules, then you need to file the 1099-NEC.
Some states require employers to file state 1099s. Check to see if the same is true for your state.
Know Due Date for 1099s
The filing due date for 1099s is February 1, 2021. However, we recommend that you file these taxes by January 28, 2021, as the form must be postmarked by the contractor before the due date.
Step 2: Setting up your 1099 Account
It is preferable to categorize all payments to contractors as non-employee compensation. This obviates the need to properly set up accounts for 1099s. However, users who’ve made multiple types of cash payments to non employees, will need to properly categorize the contractors on the basis of payment type. Also, such users may also need to file both 1099-NEC and 1099-MISC.
Step 3: Update QuickBooks Desktop with Latest Release
Intuit offers regular updates for QuickBooks desktop to ensure that you’re able to correctly file your 1099s. You need to download and install these updates to correctly process the 1099-NEC and 1099-MISC forms.
To update QuickBooks Desktop, follow the steps provided below:
- From the Help menu, click on Update QuickBooks Desktop.
- From the Update Now tab, click on Reset Update.
- Select Get Updates.
- Once the update is downloaded, restart QuickBooks.
- Click on Install when the prompt appears.
Once you’ve downloaded and installed updates for QuickBooks, you’re ready to move on to create 1099s.
Step 4: Create your 1099s in QuickBooks Desktop
To create 1099s with QuickBooks desktop, follow the steps provided below:
- From the Vendors menu, click on 1099 Forms.
- Click on Print/Efile 1099 Forms.
- Create a Backup of your company file.
- Click on Get Started. First, you can create the 1099-NEC form and then follow the same steps to create 1099-MISC.
- Select all the vendors and contractors for whom you need to create the 1099 form. Click on Continue.
- Verify all the information related to the contractor or vendor is correct. At this point, you can edit information by simply double clicking on a particular vendor. Click on Continue.
- Go to the Apply payment to this 1099 box section and click on the drop-down menu. Select the account to link with a particular payment. Gray boxes indicate that the account is already mapped to another 1099 form. After you’ve mapped the vendor payment accounts, click on Continue.
- Click on View Excluded Payments or View Included Payments for detailed reports of the payments included in or excluded from the 1099 form. At this point, you can remove any electronic transactions from the 1099 form.
- For each vendor, review the amount mentioned against their name. Click on Continue.
- Decide to print or e-file the 1099 forms.
You’ve successfully created 1099 forms. However, you must note the following:
- For non employee compensation, most organizations will choose Box 1 on 1099-NEC form. However, check with your accountant that recent changes to the rules don’t impact the way you report these taxes.
- There are special rules for Boxes 16 & 17 if you’re filing for Wisconsin or New Jersey.
Step 5: Import the Data into Tax1099
To create a Tax1099 Account, follow the steps provided below:
- Click on Go to 1099 E-File Service. This option will appear once you’ve created your 1099 tax forms.
- Sign up for or log in to a Tax1099 Account.
- Follow the on-screen instructions to import tax data prepared in QuickBooks Desktop.
Tax1099 is quite adept at creating a personalized import method. We recommend that you follow the provided method instead of manually making any changes.
Step 6: E-File the 1099 Tax Forms
Once the 1099 tax forms created in QuickBooks Desktop are imported into the Tax1099 account, you can e-file your taxes. To do so, follow the steps provided below:
- Make any changes to the information by clicking on the name of a vendor or the edit button. Click on Update.
- Enter information in appropriate state boxes to file state 1099s.
- Select all the vendors and contractors for whom you want to e-file the taxes. Click on Next.
- Select the method to send the respective copy of 1099 to each vendor. You have the following options:
- USPS mail (extra charges will apply)
- Email Recipient
- Download PDF and Send Manually
- Click on Next if you want to file 1099s with your state. Also, select your state. Otherwise, click on Calculate Tax1099.com Fee.
- The Payment Page will open up. Click on Pay & Submit after entering your payment info.
- Repeat the steps if you wish to create and file the 1099-MISC.
You have successfully created and filed 1099s with QuickBooks Desktop. This can be a long process, but following the method properly will make it as easy as pie.
Step 7: Check Filing Status for 1099s
To check the filing status of your 1099s, follow the steps provided below:
- Log in to your Tax1099 account.
- Click on the + Sign. It is in the upper right corner of the page.
- Click on Check on Status.
- Enter the 9 digit reference number.
- Click on Check Status.
I hope the above mention information will help you to Creating and Filing 1099s with QuickBooks Desktop. If you have any issue related to 1099s file in QuickBooks Desktop, then connect with our QuickBooks technical support.
Frequently Asked Questions about 1099s in QuickBooks Desktop
1. Can I file the taxes directly through QuickBooks desktop without creating a Tax1099 Account?
No. However, Tax1099 can import all the transactions from QuickBooks and help you file the 1099s. All the 1099s created in QuickBooks are imported directly into your Tax1099 account.
2. How do I send a copy of the 1099 to my contractor?
To send a copy of 1099 to your contractor, you have three options: email, USPS mail, and manual email. Note that sending the copy through USPS mail will accrue cost.
3. Do I need to worry about any rule changes regarding the 1099s?
No, QuickBooks will inform you about any changes made by the federal government in the manner of which 1099s are reported. You should simply follow the instruction, but consulting an accountant beforehand is highly recommended.