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QuickBooks® Online: Four Tips to Make 1099 Time a Breeze

August 23, 2023


January can be a hectic time for many business owners, bookkeepers, or accountants due to closing books for year end and preparation of 1099 information returns. Karen Johnson, CPA and QuickBooks® ProAdvisor, outlines steps you can take to ensure you can print an accurate and complete 1099 Transaction Detail Report to support 1099 preparation or file 1099’s directly within QuickBooks Online.

First, for those vendors for which you deem the need to issue 1099’s based on review of each W-9 form, update QBO vendor profiles using these steps:

      • Go to “Get things done” from the left-hand menu.

      • Then “Get paid & pay.”  

      • Click on “Vendors.”  

      • Click on each vendor which will require a 1099 to be issued.  

      • Click the “Edit” button in the upper right of your screen and update the vendor’s address and Business ID number or Social Security number and check the “track payments for 1099” box. 

      • Click the green “Save” button to save.   

    Second, identify transactions without vendors assigned to them by viewing the “Expenses by Vendor Summary” through the most recent month end date.  If payments don’t have vendors assigned to them, they will not be included in the 1099 Transaction Detail Report so you may miss some 1099’s that need to be prepared or prepare 1099’s that report incorrect amounts. Assign vendors to each transaction now so you are ready. Please note that credit card charges will not be reported on 1099’s. Although it is a best practice to assign vendors to each credit card charge, these will not be part of the 1099 process, and you can pass on updating those vendors for purposes of this article. 

    To view the “Expenses by Vendor Summary” and update vendors for every transaction, follow these steps:

        • Go to “Reports” from the left-hand menu.

        • Click on the “Expenses by Vendor Summary.”  

        • Select the report period from the beginning of the calendar year to the most recent month-end date and run the report.  

        • Scroll to the bottom and notice if there were payments that were not assigned to vendors. An amount will appear adjacent to the words “Not Specified” if this is the case.  

        • You can click on the “Not Specified” amount to view all the transactions that were not assigned to vendors. 

        • If payments don’t have vendors assigned to them click on each transaction and assign the appropriate vendor.   

      Third, “map” (select the accounts from the chart of accounts from which QuickBooks Online will pull 1099 data). The mapping should be reviewed each year in case new accounts that will capture 1099 vendor activity were added during the year. To map the accounts:

          • Go to “Get things done” from the left-hand menu.

          • Then “Get paid & pay.”  

          • Click on “Vendors.”  

          • Click on the “Prepare 1099s” button in the upper right. 

          • Click on “Continue your 1099’s.”  

          • Enter your company information in the “review your company info” section if it is not already completed.  

          • Click Next. 

          • Now complete the “Map your QuickBooks contractor payments to 1099 boxes” section. Select the accounts from the chart of accounts that need to be reviewed by QuickBooks to look for potential 1099 filing requirements. To do this, check the box for “Non-employee compensation” and use the drop-down box to select the accounts that might contain payments for services (examples are contract labor, legal fees, landscaping expense). When in doubt, check the account. 

          • Next, check the box for “Rents” if you pay rent to anyone. Then select all the rent accounts from the chart of accounts using the drop-down box.  

        You may have other types of 1099 requirements that are listed in this section. If so, complete those sections. Be sure to click on the button on the bottom right, “Save and finish later.” These updates will be saved and ready come 1099 preparation time!  

        Fourth, attach the W-9’s received from vendors to each vendor’s profile in QuickBooks Online for easy reference. To attach the W-9, open a vendor and click on the “Edit” button. Scroll to “Attachments.” Drag and drop the W-9 into the attachment box. Click the green “Save” button. It is a best practice to attach a W-9 form to vendor profile whether you are required to file a 1099 for that vendor or not.  That way, when you are looking at a vendor you can readily identify why you checked the box or not.

        Once these four steps are taken, you have set yourself up to print an accurate and complete 1099 Transaction Detail Report to support 1099 preparation.  This is the report you can send to Clark Schaefer Hackett if we are filing the 1099’s on your behalf. If you file1099’s directly within the QuickBooks Online software, this will also prepare you for that exercise. Finally, you have the documentation filed in an easily accessible location. 

        Please note that the instructions in this article are based on the “Business View” in QuickBooks Online. If you use the “Accountant’s View,” the instructions will be slightly different. To toggle between the views, go to the Gear icon in the upper right and select “Switch to” in blue font to select the view you prefer. If you need assistance with any of the QuickBooks Online tasks mentioned in this article, please reach out to Karen Johnson to request a consultation.  

        Helpful snips of the QuickBooks Online sections discussed in this article:

        To select (“map”) accounts from the chart of accounts to be reviewed for 1099 activity:

        To check the 1099 box on vendor profiles:

        To attach a W-9 to a vendor profile:

        Reprinted with permission © Intuit Inc. All rights reserved.

        All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.


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