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Jan
25

QuickBooks Tutorial: How to Prepare 1099 and 1096

Tax Return_Form 1099Jan 31st is just around the corner. That means you only have a few days left to prepare and send your 1099′s. Last week we discussed 1099′s – what is a 1099, who gets a 1099, and when 1099′s are send/received. This week I want to walk you through how to prepare 1099′s using QuickBooks. Don’t forget your 1099′s must be mailed to your vendors no later than January 31, 2011.

The quickest and easiest way to prepare your 1099′s is by using QuickBooks’ 1099 and 1096 Wizard. The QuickBooks 1099 and 1096 Wizard provides you with 4 steps to easily verify your information, review your data, and double check that your numbers are correct before printing your 1099′s.

To access the QuickBooks 1099 and 1096 Wizard, click on the Vendors menu and choose the Print/E-file 1099s… option. The wizard will open and will suggest you take the following steps:

  1. Review Your 1099 Vendors – The Vendor 1099 Review report is helpful so you can verify that the vendors who should be receiving a 1099 are marked “yes” and to double check that the vendors marked “yes” have a Tax ID number and a complete mailing address.
  2. Map Your Accounts to Boxes on 1099 – This window allows you to select the account (general ledger account aka chart of accounts) you want to be reported on the 1099′s. You can assign multiple accounts to each 1099 box category, but you can not assign the same account to multiple 1099 categories. You will also want to verify the threshold (minimum) amount you must report to the IRS matches the current IRS rules.
  3. Review Your 1099 Data – The 1099 Summary Report opens, providing you with the opportunity to see each vendor that is eligible for a 1099 and the amount paid to that vendor. Please note the report is sorted by Box Number (which box the amount will be reported in on the 1099). You can double click any vendor to see the details behind the total amount showing on the report. If you notice a check or bill was originally posted to the wrong account (i.e. it’s not showing up on the 1099 or it’s being reporting in the wrong box), you are able to go back and change the account on the the check or bill. I recommend printing a copy of the report. It is a good tool to double-check all 1099 vendors are included.
    Additional Steps to Ensure 1099 Reporting Accuracy -

    1. First, open Quickbooks’ 1099 Details report. To access the 1099 Details report, go to the Reports menu and select Vendors & Payables. Then click on the 1099 Detail option to open the report. Make sure the report dates are correct, choose the “All Vendors” option, and the “Only 1099 Accounts” option. Refresh your report. Look into any vendors that show up on your QuickBooks 1099 Details report that do not show up on your QuickBooks 1099 Summary report. If you find vendors who are supposed to receive a 1099 – open their vendor record and click the Form 1099 button on the Additional Information tab and verify you have their Tax ID Number and mailing address.
    2. Secondly, in the QuickBooks 1099 Details Report change the 1099 Options to: “Only 1099 Vendors” and “All Allowed Accounts.” This new version of the 1099 Details Report allows you to verify the amount you are reporting on the 1099. If you find any vendor payments that were accidentally posted to the wrong account, you can double click the listing to open the transaction to change the account. After making the change, refresh your report to make sure the amounts match.
    3. Once the vendors and amounts have been verified for accuracy, you are ready to print your 1099′s.

  4. E-file and Print on Plain Paper OR Print on Preprinted Forms -
    1. QuickBooks 2011 is the first version that gives you the option to file your 1099′s electronically through QuickBooks. Click the Use Intuit 1099 E-File Service button to proceed to file your 1099′s electronically. Note: if you file your 1099′s electronically, you do not need to file a 1096. Another nice feature is that you are able to print your vendor’s copies on plain paper, so you do not have to worry about buying and printing on the preprinted forms.
    2. To print your 1099′s and 1096 on preprinted forms, click the Print 1099′s button. This will walk you through printing your 1099′s and 1096 on preprinted forms. Preprinted forms can be purchased at most major office supply stores (i.e. Office Max) or ordered for free from the IRS. Printed Form 1099′s and Form 1096 will be filed with the IRS by mail.

Keep in mind most 1099′s need to be mailed to your vendors by January 31st and then filed with the IRS by February 28th, 2011.

Additional Resources
Instructions for Form 1099-MISC (2010).

Form 1099-MISC (2010)

Instructions and Form 1096 (2010)

A Guide to Information Returns

Information about the FIRE System (electronic filing)

Form W-9

Who Can Help You File 1099′s
If you get stuck or have questions, contact the IRS, your lawyer, or your CPA.

____________________________________________________________

Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.

9 comments

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  1. Corie says:

    We have QuickBooks Pro 2011 and I was wondering if the vendors w-9 address is different from mailing how do we get both addresses in the system? I know we have to use what the w-9 says.

    Thanks
    Corie

    1. Michelle Edwards, CPA says:

      Hi Corie,

      Sorry for my slow response. There are a couple of places you can store multiple addresses for your vendors. When you edit your vendor, you can keep track of the addresses under the “Address Info Tab” and put one address in the “Billed From Address” box and the other address in the “Shipped From Address” box. You can always make a note to remind you which one is the mailing address & which one is the 1099 address. The second option is to create a “custom field” in the “Additional Info Tab”. That could be a good place to store your 1099 address. Just remember to update the address when you print the 1099 or at least mail it to the address they specified.

  2. Meghan says:

    Hi Michelle,

    I’m pulling my hair out here over not knowing what I don’t know! I’m new to the world of bookkeeping and unfortunately the person who held my position previously was hired in April of 2011 and didn’t know anything about end of year tax requirements. So, I’m learning everything on the fly (and I do mean everything).

    What’s making me nuts isn’t the quickbooks part, that’s easy enough to pick up. It’s – HOW do you know whether a company is eligible for a 1099? The IRS website is like reading Russian to me. And more broadly, are these things that you learn within the scope of earning a CPA or bookkeeping certificate? If I want to become knowledgeable at my job, where do I even start??

    Thanks so much for your help!

    Meghan

    1. Michelle Edwards, CPA says:

      Hi Meghan,

      Unfortunately learning 1099′s comes with experience. After you file them for a year, two, or more you get more and more comfortable with the IRS requirements. A general rule of thumb is that anyone you pay $600 or more during the course of the year, unless they are a corporation, you need to send a 1099-Misc. Let me know if you’re still working on them, I’d be more than happy to set up a virtual training session with you to help you get your 1099′s prepared.

      I also offer an “Ask a CPA” option where you can ask a “quick question” and I’ll help walk you though the answer for only $30. You can find the details here at “Ask a CPA” http://trailheadaccounting.com/ask-a-cpa/. It’s a great resource for people in your situation that are learning QuickBoooks and bookkeeping on the fly. It’s an inexpensive way to help you get unstuck and moving forward with your tasks on hand. I’m always looking for blogging ideas, so feel free to ask more questions here or via email. No guarantee how quickly those questions will get answered, but I try to get back to them within a few weeks.

      I’m looking forward to helping you out!

      Thanks,
      Michelle

  3. Sheryl says:

    Why does my summary report have the correct amounts but in the to print on the 1099 it is zerio>

    1. Michelle Edwards, CPA says:

      Oh no, that’s got to be frustrating. Are your chart of accounts mapped correctly to 1099 boxes? If you run the 1099 wizzard (Vendors –> Print/E-file 1099′s…) step #2 helps you run though your chart of accounts to ensure they are mapped correctly to boxes on your 1099. They could be mapped to the wrong box or marked as not needing to be reported on a 1099. Please let me know if that doesn’t do the trick.

  4. Tyler says:

    Wonderful article and I am really very helpful thank you

    1. Michelle Edwards, CPA says:

      Thanks for reading!

  5. Florine Cresswell says:

    Thanks for sharing this. We’re always looking for smart resources to send to clients and contractors, and this write-up is without a doubt worth sharing!

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