It’s that time of year when businesses start taking a closer look at who needs a 1099 for 2011. QuickBooks has a nice wizard to help you with the process. The steps below are for versions 2011 and older. The new patch for 2012 just came out at this writing and they have completely revamped the 1099 section, so I will have a separate article on that (once I take a closer look at it.) To get started, click on Vendors, Print/E-File 1099’s.
- This first step has you review your Vendor list. You should take the time to review this list be sure you don’t miss anyone who’s eligible. Verify with your accountant the types of businesses who need 1099’s – it’s more than many people realize and you don’t want to get penalized for omitting someone). Also look to see if you have their contact information and Tax ID. If you want to review this list on a more frequent basis (perhaps monthly or quarterly), so it’s not such a big job at year-end, let me know – we can memorize a simple report and make it a click away!
If you need to make changes to several Vendors and you are using version 2010 or newer, then you can use the Add/Edit Multiple Lists, customize the fields so you see 1099 Eligible, Tax ID, and address, then you can quickly edit. If you need help with this, let me know. This feature is MUCH faster than having to go into each Vendor record.
2. What Expense (and perhaps Cost of Goods) accounts do you use to pay these Vendors? Again, worth reviewing. To select multiple accounts, you can click on Map Accounts in the Wizard, which will take you to the 1099 Company Preferences. Once you select Multiple, you can pick as many as needed.
3. There are different categories and thresholds, although most use the Nonemployee Compensation. Click on Run Report in step 3. Review the Uncategorized Expenses – perhaps some of them need to be included which means you need to revise your mapping.
4. You can file with the IRS electronically (depending on how many you have, this may be a requirement – check with your accountant). You can print 1099’s you need to mail from within QuickBooks. You might need to test a couple to be sure they align okay in the boxes on the form before printing the entire batch. If you have only a few to do, and you don’t mind doing them by hand, you can also order 1099 forms from the IRS for free.
Don’t wait until the last minute to work on these. You can get started now so January won’t be so hectic with year-end activities. Let me know if you have questions or need assistance. I hope it’s a smooth process for you this year!