QuickBooks 1099 Guide: Creating, Filing, Printing, and More

It’s tax filing time again and the mere thought of the numerous 1099s you need to process stresses you out. QuickBooks can simplify it for you. 

Whether you’re using QuickBooks Online or QuickBooks Desktop, the software makes handling 1099 forms easier. You can create, manage, and file your 1099s right from QuickBooks, without juggling stacks of paperwork or worrying about missing a step.

In this guide, we’ll walk you through everything you need to know about 1099 forms in QuickBooks—from understanding the basics to filing them electronically.

What Are 1099 Forms?

IRS Form 1099 is a tax document used to report payments made to non-employees such as independent contractors, freelancers, or vendors. These forms help the IRS track income that doesn’t come from traditional wages or salaries.

If you pay contractors in cash, check, or direct deposit, you’ll need to issue a 1099 to report those payments. However, payments made via credit card, debit card, or third-party platforms (like PayPal) should not be reported on a 1099—the payment processors handle that reporting for you.

Common Types of 1099 Forms

For most businesses, especially in construction or field services, the two most relevant 1099 forms are:

1. 1099-NEC (Non-Employee Compensation)

What It’s For

Reporting payments of $600 or more made to non-employees, such as contractors, freelancers, or vendors, for services provided.

When to Use It

• If you paid $600 or more to a non-employee during the year.
• If you withheld any federal income tax from a non-employee under backup withholding rules.

Note: If you previously reported non-employee compensation in Box 7 of the 1099-MISC, this information is now reported on the 1099-NEC.

2. 1099-MISC (Miscellaneous Income)

What It’s For

The 1099-MISC form is used to report miscellaneous income of $600 or more that doesn’t fall under non-employee compensation. This form covers a range of payment types, including:

• Rent: Payments made for office space, equipment rentals, or property leases.
• Prizes and Awards: Cash prizes, contest winnings, or awards given to non-employees.
• Legal Settlements: Payments for damages, lawsuit settlements, or attorney fees.
• Royalties: Payments of $10 or more for things like book royalties, music royalties, or licensing fees.
• Fishing Boat Proceeds: Share of proceeds from catching fish if certain conditions apply.
• Crop Insurance Proceeds: Payments for crop insurance payouts.
• Other Income Payments: Miscellaneous payments not classified elsewhere, such as certain types of medical and healthcare payments or payments to attorneys.

When to Use It

Use the 1099-MISC form to report payments that:

1. Don’t fall under non-employee compensation (which should be reported on the 1099-NEC).
2. Meet or exceed the $600 threshold (except for royalties, which require reporting if $10 or more).

Examples of when to file a 1099-MISC include:

• You paid $1,200 in rent for your office space to a property owner.
• You awarded a $750 cash prize to a contest winner.
• You paid an attorney $600 for legal services related to a settlement.
• You issued $15 in royalties for book sales.

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When Should You File 1099 Forms?

1. 1099-NEC

Due Date: Must be filed with the IRS and provided to contractors by January 31.

2. 1099-MISC

• Contractor Copy: Due by January 31.
• IRS Filing: Due by March 31 if filing electronically (or February 28 if filing by paper).

Quick Tip

To ensure your 1099s are postmarked to your contractors by January 31, e-file by January 27 at 5:00 PM PT. QuickBooks supports e-filing until April 30.

Creating and Filing 1099s with QuickBooks Online

QuickBooks Online makes it easy to prepare and file your federal and state 1099-NEC and 1099-MISC forms using the information already in your account. Follow these steps to ensure your filings are accurate and compliant.

Step 1: Create Your 1099s

1. Navigate to 1099 Settings

• Go to “Payroll” > “Contractors” (or “Expenses” > “Contractors”).
• Select “Prepare 1099s.”

2. Verify Your Company Information

• Make sure your company name, email, address, and tax ID are correct.
• Select “Edit ✎” to make any necessary changes.
• Click “Confirm info and get started.”

3. Select Accounts for 1099 Payments

• Choose or confirm the accounts used for your 1099 expenses or payments, then click “Add.”
• Next to each account added, select the appropriate 1099 box (Box 1 for Nonemployee Compensation on 1099-NEC or other boxes as needed).
• Click “Next.”

4. Select Contractors to Receive 1099s

• On the “Tracked for 1099” tab, check the box next to each contractor who should get a 1099.
• Verify the contractor’s name, email, address, and Taxpayer Identification Number (TIN). Select “Edit ✎” to make corrections.
• If a contractor is missing, go to the “Not tracked for 1099” tab, select “Add to tracked list”, then click “Back.”

5. Review Reportable Amounts

• Check the “Reportable total amount” for each contractor.
• If certain payments are missing, select “Non-reportable payments only” from the dropdown to view all payments.

6. Preview 1099 Forms

• Click “Preview” to review each 1099 form and the amounts in each box.
• Click “Continue to 1099-MISCs” to review your 1099-MISC forms.
• Select “Next.”

7. Choose Filing Method

• Click “Continue to E-File” to e-file your 1099s.
• Or select “I’ll print and mail” if you prefer to print and mail the forms yourself.

Step 2: E-File Your 1099s

1. Start the E-File Process

After preparing your 1099s, select the e-file option and verify your 1099 details.

2. Follow On-Screen Instructions

• Complete the steps to e-file your federal and state 1099 forms (if applicable).
• For state-specific filing requirements, refer to “File your state 1099 forms.”

3. Contractor Copy Delivery

• Choose how to deliver copies to your contractors (email or mail). Note: Extra fees may apply if QuickBooks mails the forms for you.
• If the contractor’s email is incorrect, update it in QuickBooks, then go back through the e-file process.

4. Enter Billing Information

If prompted, enter your billing info to complete the e-filing process.

Note: The paper version of Copy A of Form 1099 is for your records only. Do not mail this form to the IRS.

Step 3: Check Your Filing Status

1. Go to 1099 Filings

Navigate to “Taxes” > “1099 filings.”

2. View Filing Status

Check the Filing status column. Here’s what each status means:

• Not Submitted: The form hasn’t been e-filed yet.
• Submitted: The form has been sent to the IRS. If you need to revise it, you may need to file a manual amendment.
• Received by IRS: The IRS has received and is processing your form. A confirmation email will be sent approximately a week after acceptance.

3. View PDF Copies

Select “View 1099” to download a PDF copy for your records.

Creating and Filing 1099s with QuickBooks Desktop

QuickBooks Desktop helps you easily prepare and file your federal 1099-NEC and 1099-MISC forms using the information in your account. Follow these steps to ensure your filings are accurate and compliant.

Step 1: Update QuickBooks Desktop

Before you begin, make sure your QuickBooks Desktop is up-to-date to ensure 1099 forms print correctly.

QuickBooks Desktop:

• Go to “Help” > “Update QuickBooks Desktop.”
• Select the “Reset Update” checkbox and download the latest updates.

QuickBooks Desktop for Mac:

Go to “QuickBooks” > “Check for QuickBooks Updates.”

Step 2: Create Your 1099s in QuickBooks Desktop

Follow these steps to prepare your 1099s:

1. Open the 1099 Wizard

• Go to “Vendors” > “1099 Forms” > “Print/E-file 1099 Forms.”
• Create a backup of your company file.

2. Get Started with the Correct Form

• Select “Get started” for either the 1099-NEC or 1099-MISC form.
• Note: If you need to create both forms, repeat these steps for each type.

3. Select Vendors

Choose the vendors who need a 1099 form and click “Continue.”

4. Verify Vendor Information

• Check that each vendor’s name, address, and Taxpayer Identification Number (TIN) are correct.
• To update any details, double-click on the field you need to correct.
• Click “Continue.”

5. Map Accounts to 1099 Boxes

• In the “Apply payments to this 1099 box” section, select the account you want to link to the appropriate 1099 box (e.g., Nonemployee Compensation, Box 1 for 1099-NEC).
• If any boxes are gray, they’re already mapped to another 1099 form.
• Click “Continue.”
• Note: If you see a red message about thresholds, select “Show IRS 1099-MISC filing thresholds” and choose “Reset to IRS Thresholds.”

6. Review Payment Information

• Check the included and excluded payments by selecting “View Included Payments” or “View Excluded Payments.”
• Click “Continue.”

7. Review Vendors and Amounts

• Confirm the vendors and amounts you’re reporting.
• To view vendors who don’t meet the threshold, select “View Summary Report.”
• Click “Continue.”

8. Choose Filing Method

• Select either “Print 1099s” or “E-file 1099s.”
• If you choose to e-file, follow the steps below.

Step 3: Import Data into Tax1099

To e-file your 1099s, QuickBooks Desktop integrates with Tax1099:

1. Click “E-file” in the 1099 Wizard.
2. Follow the on-screen prompts to import your data into your Tax1099 account.

Step 4: E-File Your 1099s in Tax1099

1. Review and Edit

• In the Tax1099 Dashboard, review the vendor names, amounts, and boxes.
• To make edits, select the vendor name or click “Edit,” then “Update.”
• Note: Changes made in Tax1099 don’t sync back to QuickBooks Desktop.

2. Select Vendors for E-Filing

• Check the box next to each vendor you want to e-file and click “Next.”
• Correct any errors if prompted and proceed.

3. Choose Delivery Options

• Select how you want to send copies to your contractors (USPS Mail or Email Recipient).
• You can also download PDFs to distribute the forms yourself.
• Note: Fees apply for USPS mailing.

4. Submit Your Forms

• Confirm your selections and enter your billing info.
• Click “Pay & Submit to e-File.”

Tip: If you need to file both 1099-NEC and 1099-MISC forms, repeat these steps for each form type.

Step 5: Check Your Filing Status

After submitting your 1099s to the IRS:

1. Check Your Status in Tax1099

Log into your Tax1099 account and view the status of your forms.

2. Statuses

• Not Submitted: Forms haven’t been e-filed yet.
• Submitted: Forms have been sent to the IRS.
• Received by IRS: The IRS has received and is processing the forms.

Comparing 1099 Filing with QuickBooks Online vs. QuickBooks Desktop

Choosing the right version of QuickBooks for managing your 1099s depends on your workflow, preferences, and business needs. 

Below is a detailed comparison of the process for creating and filing 1099s using QuickBooks Online and QuickBooks Desktop.

QuickBooks 1099 Best Practices

Here are some best practices to make managing 1099 forms in QuickBooks Online or QuickBooks Desktop smooth and stress-free.

1. Accurate Vendor Information

Before you start paying contractors, make sure you have their complete and accurate details:

• Collect W-9 Forms Early: Request a completed W-9 form from each contractor before you pay them. This form includes their name, address, and Taxpayer Identification Number (TIN).
• Verify Details in QuickBooks: Go to your vendor list in QuickBooks and double-check that each contractor’s name, address, and TIN are correct.
• Keep It Updated: If a contractor moves or changes their info, update their profile in QuickBooks immediately.

Why It Matters: Accurate information ensures your 1099 forms are correct. Mistakes with TINs or addresses can lead to IRS penalties or rejected forms.

2. Consistent Record-Keeping

Good record-keeping throughout the year saves you from scrambling at tax time:

• Categorize Payments Correctly: When recording payments in QuickBooks, use the right expense categories (e.g., subcontractor labor).
• Mark Vendors for 1099 Tracking: In QuickBooks, flag each contractor as eligible for 1099 reporting.
• Attach Receipts and Invoices: Upload and attach receipts or invoices to each payment for easy reference.

Why It Matters: Consistent records make it easier to generate accurate 1099s without hunting for missing details.

3. Timely Data Entry

Don’t wait until the end of the year to enter your transactions:

• Enter Payments Promptly: Log payments to contractors in QuickBooks as they happen.
• Review Monthly: At the end of each month, review your transactions to ensure everything is recorded correctly.
• Set Reminders: Use QuickBooks reminders to prompt you to update records regularly.

Why It Matters: Timely data entry ensures your records stay accurate, reducing the chance of missing payments or making last-minute errors.

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4. Regular Data Audits

Catch mistakes early with regular reviews of your vendor and payment data:

• Run 1099 Reports Quarterly: Generate 1099 reports in QuickBooks every quarter to check for any discrepancies.
• Check for Missing Info: Make sure all contractors who should get a 1099 are flagged correctly and have complete information.
• Cross-Verify Payments: Compare your QuickBooks records with your bank statements to ensure all contractor payments are accounted for.

Why It Matters: Regular audits help you fix errors long before tax season, making filing 1099s a breeze.

5. IRS Compliance and Deadlines

Stay compliant by knowing the rules and deadlines for 1099 filing:

Key Deadlines:

• 1099-NEC: File with the IRS and provide copies to contractors by January 31.
• 1099-MISC: Provide copies to recipients by January 31 and file with the IRS by February 28 (or March 31 if e-filing).

Exclude Credit Card Payments: Payments made via credit cards or third-party services like PayPal don’t need to be reported on 1099-NEC forms.

Keep Records for 3 Years: Hold onto copies of 1099 forms and related payment records for at least three years.

Why It Matters: Meeting deadlines and IRS requirements keeps your business compliant and helps you avoid penalties.

Wrapping Up

When you’re working with independent contractors and subcontractors, getting 1099s right helps build trust and keeps things running smoothly. Luckily, QuickBooks makes this process a whole lot easier. 

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With Workyard smoothly integrating into QuickBooks, paying your contractors and generating accurate 1099s has never been simpler. 

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