Intuit Accountants News Central

Generating 1099s in QuickBooks®

Article Post Date
December 6th 2012 by Woody Adams

The IRS issued new reporting regulations for the tax year 2011 1099-MISC form, and it is the same for TY 2012. These regulations excluded some forms of payment from the 1099-MISC form. The excluded payments are to be reported on the third party form 1099-K.

If your clients have made payments to 1099 vendors in tax year 2012 using cash or checks, this does NOT apply to them. If, however, they used other forms of payment (credit/debit cards and third-party payment services like PayPal), they will only need to report certain types of transactions and exclude others. Payments using the Credit Card Charge form in QuickBooks® are automatically excluded from the 1099 MISC.

Important Note: When you use check payments (in either Pay Bills or Write Checks) to record a vendor payment made with a credit card, debit card, or gift card, or if you are using a third-party payment network such as PayPal, you should note the payment method in the check number field. QuickBooks recognizes, and automatically excludes from Form 1099-MISC, any check payment containing one of the following notations in the check number field (limited to 8 characters):

QuickBooks automatically excludes from Form 1099-MISC any bill payment made using the credit card payment method.

Intuit® updated the 1099 Wizard for TY 2012 in our 2013 QuickBooks Windows and Mac products, including QuickBooks Online, to incorporate payment exclusion features that comply with the 1099-MISC regulation changes. QuickBooks 2012 Windows and Mac also have the updated wizard. Intuit has published manual workarounds for Windows and Mac for customers on supported prior versions of QuickBooks (2010 and 2011). Visit our Supportpage on Intuit Payroll for additional information on the new IRS 1099-MISC regulations and to learn about the options to help customers comply using QuickBooks for Windows and Mac. However, anyone with QuickBooks 2012 or 2013 can get a backup of a supported prior year client file, upgrade the file to 2012 or 2013, and use the updated 1099 wizard. You just will not be able to send this file back to your client, but that should not be a big deal … you can still support your client.

I encourage all accountants and ProAdvisors who do 1099 work for their clients to use QB 2012 or 2013 (Mac or Windows supported), or QuickBooks Online. QuickBooks 2010 and 2011 will have the old 1099 wizard and will not automatically exclude 1099 K payments. Below are some screenshots to help you along:

QuickBooks Windows 2013 example of where to go and what does the wizard looks like:

QuickBooks Mac 2013, where to go and what it looks like:

For QuickBooks Online users, you must be in the Plus edition to process 1099/1096 forms. If your client is on QuickBooks Online Essentials, they can sign up for the 1099 E-file service standalone product, but it will not integrate at all with QuickBooks Online. You will just manually populate the info and use the service to e-File the 1099.

For QuickBooks Online Plus users, here is where you go and what it looks like:

Go to your Vendor list and click button at the bottom left:

Next fill out the appropriate fields and follow the steps:

 

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3 Comments »

  1. Woody,
    Considering I just found this site, this was an incredible article to read first! Thank you so much for the very helpful information. I have been designating the payment method for the last year as db and ach for my own ability to exclude. This will make it that much easier.

    Comment by sbbsflorida — December 6, 2012 @ 6:01 pm

  2. Right on sbbsflorida! I hope the 1099 season for you flows smooth and without obstacles. I was just down in Sarasota presenting at a conference. Love the gulf coast….

    Comment by Woody Adams — December 7, 2012 @ 7:54 am

  3. Thanks for the article!

    Comment by Shelly Robbins — December 14, 2012 @ 9:40 am

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