How to Create and File 1099s in QB Online

Blog Article

Creating and filing 1099 forms in QB Online (QBO) is a straightforward process, and QB Online makes it easy to generate and file the forms to ensure compliance with IRS requirements. Here's how to do it:

1. Set Up 1099 Contractors in QB Online

Before generating 1099 forms, you need to ensure that your contractors/vendors are set up correctly.

Steps:

Go to the Gear Icon (top right) and select "Account and Settings".

Select the "Expenses" tab.

Scroll down to "Bills and Expenses", and check the box for "Track payments for 1099".

Click Save and then Done.

2. Review Vendor Information

You need to make sure that the vendors you are issuing 1099s to are set up with the correct information.

Steps:

Go to the Expenses menu, and then select Vendors.

For each vendor, make sure that:
- The vendor has a Tax ID (either Social Security Number or Employer Identification Number).
- The "Track payments for 1099" box is checked. You can do this by editing the vendor profile and selecting the checkbox.

3. Categorize Your Payments

QB will automatically track your payments to contractors that are 1099-eligible. Ensure that you categorize your payments correctly so that they are included in the 1099 reporting.

For contractors: Use the appropriate expense account (usually, "Contractor" or "Subcontractor").

For non-1099 vendors: Use other accounts as needed.

4. Generate 1099 Forms

After ensuring everything is set up correctly, you can now generate the 1099 forms.

Steps:

Go to the Taxes menu on the left-hand side of the screen.

Select "1099 filings" under the Taxes tab.

QB Online will guide you through the process, including verifying vendor eligibility and selecting the appropriate tax year.

Follow the prompts to:
- Review and confirm the contractors who should receive a 1099 form.
- Verify the amounts reported, including payments made to contractors that exceed the $600 threshold.
- Adjust or correct any data, if necessary.

5. File Your 1099 Forms

Once you've reviewed and confirmed everything, QB Online allows you to e-file the forms directly.

Steps:

After reviewing and confirming, you'll have the option to file electronically with the IRS.

Pay for e-filing (there may be a fee associated).

QB will file the 1099s electronically and provide you with confirmation.

6. Send 1099 Forms to Contractors

Once filed with the IRS, QB Online also gives you the option to send 1099 forms to your contractors.

Steps:

You can send forms directly to contractors via email, or you can print them and mail them out.

You can choose to send forms to contractors as PDFs or through postal mail.

7. Important Tips

Deadline for Filing: The IRS deadline for filing 1099s is typically January 31st for the previous tax year.

Double-check your data: Always make sure to review the details for each vendor, especially tax IDs and payment amounts, to avoid errors.

Review the thresholds: Payments made to contractors totaling $600 or more in a year are typically reportable on the 1099-NEC.

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HOW TO CREATE AND FILE 1099S IN QB ONLINE

How to Create and File 1099s in QB Online