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QuickBooks Tips Blog

Video QuickBooks Tip: Setting Up 1099 Contractors In QuickBooks

Posted by Matt Roberge on Aug 29, 2012 8:16:00 AM

In this QuickBooks video blog we will go over how to properly set up and track 1099 contractors in QuickBooks.  Issuing 1099's is a pretty simple task but your QuickBooks company file must be set up properly for everything to work flawlessly.  The last thing you want to do is issue incorrect information to the IRS.

Changing the QuickBooks 1099 Preferences

The first thing you need to do is let QuickBooks know that you issue 1099's.  In QuickBooks go to Edit/Preferences/Tax:1099.  Then under the company preferences tab select 'Yes' next to the question do you file 1099 forms.  In the box below you want to make sure to map the correct QuickBooks account or accounts from your chart of accounts to each specific 1099 category.  It might not be a bad idea to review this section with your CPA to make sure you are handling it correctly.  

Marking the vendor as eligible for a 1099

In order to get your 1099's to print correctly you need to mark each independent contractor as such in the QuickBooks vendor center.  Click on the vendor center from your icon bar and then find one of the contractors you need to mark as a 1099 on the vendor list.  Double click on the vendor name and enter the information into QuickBooks just as it appears on the W-9 form your contractor filled out.  It is important to get a W-9 form from all vendors to verify if they need a 1099 or not.  Now click on the additional info tab for that vendor and towards the bottom put a check mark next to 'Vendor eligible for 1099' and fill in the Tax ID field with the info from the W-9 form.  *It is important that you use expense accounts for the contractors payments that were linked to the 1099 categories from step 1 or your 1099 information will be incorrect.*  

Printing the 1099's and 1096

Previewing and printing the 1099 and 1096 forms is quite easy in QuickBooks.  Simply go to File/Print Forms/1099's/1096.  In step 4 print on preprinted forms you can select the appropriate year and preview the forms before you print them to make sure they are correct.  If any of the contractor's info is missing or appears incorrect you need to edit the vendor information in the vendor center.  If any of your company information is missing or appears incorrect you need to edit your company information by going to Company/Company Information.  

Hot tip: it's not a bad idea to print both your 1099's and 1096 on plain paper first to make sure all info is included before printing on the pre-printed forms that are scannable by the IRS.


Topics: QuickBooks, QuickBooks Tips, QuickBooks Blog, QuickBooks Video Tips, QuickBooks advice, Bookkeeping Tips, Bookkeeping Processes, Independent Contractors, Bookkeeping mistakes, 1099's, 1099s