In this article, you’ll learn how to create and file 1099s with QuickBooks online. Paying 1099s taxes are federally mandated, which is why QuickBooks online has handy and flexible methods to help you with the same.
You’ll find the steps to create and file both 1099-MISC and 1099-NEC with QuickBooks online. A copy of the 1099s is directly mailed to the contractors, facilitating them in filing their own taxes.
Note: This article does not provide any steps to file the 1099s with Intuit Online payroll or QuickBooks Desktop. You’ll only find the steps to work with QuickBooks Online.
Find the Shortcuts
- Step 1: When and What you need to Report file a 1099
- Step 2: Set up you 1099 Accounts
- Step 3: Create your 1099s through QuickBooks Online
- Step 4: E-file the 1099s
- Step 5: Check the Filing Status
- Frequently Asked Questions
Step 1: When and What you need to Report file a 1099
Who Needs to file 1099 tax forms?
Simply put, the 1099s have to be filed for each non-employee who received payment exceeding $600 from your organization. Usually, if you have hired contractors, freelancers, or vendors, then you need to file the 1099-NEC form.
The 1099-NEC form also needs to be filed in cases where the employer has withheld federal income tax. This is usually done under the backup withholding rules.
By When do you need to File the 1099s and Pay the Tax Amount?
Our experts recommend that you file the taxes before January 28, 2021 5:00 PM PT because the form has to be postmarked to the contractor by the due date, which is February 1, 2021.
There are some states where you need to file the 1099s for the state as well. Check if your state requires the same.
Step 2: Set up you 1099 Accounts
In case you’re filing the 1099s simply for non-employee compensation, then you don’t need to adjust your accounts. This is the option most employers use for contractor payments. However, if you select any other type of payments, then you’ll have to adjust your accounts accordingly. We recommend that you consult the same with your
Step 3: Create your 1099s through QuickBooks Online
You can either e-file the tax or print and mail it. However before this, you need to properly organize the payments and contractors. In QuickBooks online, you can run 1099 reports to check the amount paid to each contractor.
Follow the steps provided below to create 1099 through QuickBooks Online:
- From the Payroll menu, click on Contractors. Otherwise, click on Expenses and
- Click on Prepare 1099s.
- Select Let’s get started.
- Review the personal information and ensure that it is correct.
- Mark all the types of payments used to pay your contractors for this particular
financial period. Click on Next.
- Verify Contractor Information. If a contractor is missing from the list:
- Click on Add from Vendor list.
- Select the missing contractors.
- Hit Next.
- Verify that the amount for each payment type is correct. You’ll find the payment
- separated according to 1099-NEC and 1099-MISC.
- Click on Next.
- Click on
- E-file for me – files the 1099s electronically.
- I’ll file myself – to create a print out to mail to the IRS.
Note: Most employers select Non-employee compensation for payment type mentioned in step 5. You should choose carefully after consulting an accountant.
Note: Any payment made electronically to contractors, for instance through credit/debit cards, gift cards, etc, won’t show up because such transactions are reported automatically by the bank. However, you should always verify the amount you paid to your contractors.
Step 4: E-file the 1099s
Since you’ve already created the 1099s through QuickBooks online, it’s time to electronically file them. Here are the steps to do the same:
- Once you’ve prepared the 1099s using QuickBooks online, click on E-file for me.
- Verify the information on the 1099s, and then click on Continue.
- Select the 1099s you want to submit. Rectify the errors in the rest.
- Click on Continue.
- Input your billing info.
- Click on Approve.
- Review the number of 1099s and the payment amount associated with them.
- Click on Continue.
- Select a delivery option for the Contractor’s copies. Contractors use these copies
to file their own taxes.
- Note: If no such option appears, then you would’ve configured the delivery method when you set up the contractor.
- 10.Verify the email addresses of the contractors. The forms will be automatically emailed to each of these contractors.
- 11.Click on Continue.
- 12.Click on View Forms to get the Copy A of the form sent to the IRS. You can access the other copies from the home page.
- 13.Click on Continue.
- 14.Select Submit final forms.
Before you click on submit, review all the information. Any incorrect form that has been already submitted cannot be corrected through QuickBooks online.
Note: You can keep the Copy A as a record of the tax payment. You don’t need to mail this form to the IRS.
Step 5: Check the Filing Status
Once you’ve created and filed the forms with the IRS, you’ll receive a confirmation of the status of the filing on your email address. Information about the filing status can also be acquired through the 1099 E-file account.
According to the statuses provided, you can understand the current status of your tax filing. You can find all the statuses for e-filing mentioned below:
- Not Submitted: Neither of 1099-NEC or 1099-MISC have been filed with the IRS.
- Submitted: The tax has been filed via QuickBooks online. At this point, you can make amendments by filing for the same.
- Received by IRS: The tax has been filed with the IRS which may be processing it or may have processed it already. Once the tax filing has been processed, you’ll receive a confirmation email from the IRS approximately within a week.
To know more or to get help with creating and filing 1099s with QuickBooks online, you
can get in touch with our QuickBooks ProAdvisor Support.
Frequently Asked Questions
What’s the Due Date for filing 1099s?
While the due date is on February 1, 2021, we recommend that you file the tax by January 28, 2021.
How do I Report Credit Card Payments made to the Contractors in 1099s?
You don’t have to report any electronic transactions, as they are automatically reported to the IRS by your bank.
I have Hired Freelancers and Paid them through Check. Do I need to Report such Transactions?
Yes, you need to report such transactions to the IRS through the 1099s. However, any electronic payments made to freelancers don’t have to be reported.