Setting up and Filing 1099-NEC and 1099-Misc in QuickBooks Online

This video is for setting up and filing the 1099-NEC and 1099-Misc for QuickBooks Online Users (QBO)

Are you ready for the new 1099-NEC?

➡️ What are the changes for the 2020 tax year?​

New for 2020, nonemployee compensation has been removed from 1099-MISC and given its own form, the 1099-NEC.

Amounts formerly reported in Box 7 of 1099-MISC in 2019 and prior years should now be reported in Box 1 of 1099-NEC.

The 1099-MISC also has a new payment type called nonqualified deferred compensation, for deferred compensation that does not meet section 409A requirements.


➡️ What is the difference between 1099-NEC and 1099-MISC?​

The 1099-NEC is specifically for reporting nonemployee compensation, whereas many other types of compensation can be reported on the 1099-MISC.

➡️ Reminder: There needs to be at least a $600 threshold to get a 1099. Third party payments such as credit card or PayPal are excluded from the 1099.

Let me know if you're ready to process your 1099's now?

➡️ 1099s in QuickBooks Online

➡️ Under Expenses

Vendors
“Prepare 1099s”


➡️ Under Payroll

Contractors
“Prepare 1099s”


➡️ Make Sure to Checkmark Your Vendors

Go to “Expenses”
“Vendors”
Open the Vendor
Click on “Edit”
Checkmark “Track payments for 1099”
Enter “Business ID No. / Social Security No.”
Enter “Address”
Click “Save”


➡️ Prepare 1099s
Click “Continue your 1099s”


➡️ 1. Company

Name & Address
Tax ID
Phone Number
Click “Next”


➡️ 2. Accounts – Mapping

**Checkmark the boxes that applies

Non – Employee Compensation (Expense Category you have)
Rents (Pick rent expense)
Other Payment Types

Royalties
Other Income
Fishing Boat Proceeds
Medical Payments
Direct Sales
Substitute payments in lieu of dividends or interest
Crop Insurance Proceeds
Gross proceeds paid to an attorney
Excess Golden Parachute
Federal Tax

Federal Tax Withheld – 1099-MISC
Federal Tax Withheld – 1099-NEC
Click “Next”


➡️ 3. Contractors

**Gives you details on who qualifies
Click “Save & Finish” and then come back


Add From Vendor List

Check/Uncheck if they qualify or not
Click “Next” to continue


➡️ 4. Review

** It’s going to tell you where it belongs (1099-NEC or 1099-MISC)

Drop-down

1099 contractors that meet threshold
1099 contractors below threshold
Contractors not marked for 1099


Print Information Sheet
If you want to print the information sheet to look at
Click “Print and Finish Later” and then come back

Or

Click “Finish Preparing 1099s”


➡️ 5. File

Click “E-File for me”
Click “Print and mail” **If you want to print it.


Who gets Forms 1099-MISC and NEC?

Copy A: IRS
Copy 1: State tax department (if applicable)
Copy B: Contractor / Vendor
Copy 2: Contractor / Vendor Copy
C: Your records

**Timestamps:**

0:00 - Intro
0:22 - Changes for 2020 tax year
0:59 - Difference between 1099-NEC & 1099- MISC
1:42 - Inside QuickBooks Online
3:46 - Prepare 1099's
4:30 - Review Company Info (Company)
4:49 - Mapping Accounts (Accounts)
6:42 - Who qualifies? (Contractors)
7:15 - Review
8:10 - Print Sheet
8:25 - $600 threshold
8:56 - E-File
9:07 - Print form
12:14 - IRS Website (1099)
13:47 - Free Workshop /Final Thoughts

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#CandusKampfer

[thatgrl]

Thank you for this video. My payments are owner's draws. Last year I was able to create a 1099 for myself, but this year none of the owner's draw payments are showing up in the 1099 "Check that the payments add up" section. I am marked down as being included for the 1099 and all payments meet the threshold. I have been trying to do this for 3 days and am banging my head against a wall. It's not working. I made sure to categorize the transactions the same way that I did last year and it still isn't working. I would greatly appreciate any help or advice.

[kellyluong]

Hi please advise, I mailed out 1099 NEC and 1096 on Jan 31th, now I realize that I need to correct 1 vendor 1099 NEC due to incorrect amount. what is the process to amend and mail out to IRS? Thx

[kimdostal]

Candus, do I need to send a 1099 to a medical clinic if they are a 501 3 c?

[MomentFilmCo]

Great video. Quick question: what is the difference between E-File Only and Print and Mail Manually. It appears E-File is the way to go, but what is the downside to this approach? Thank you!

[gotzephyr]

Thank you so much for this clear and concise explanation of 1099 on QBO. It helped TREMENDOUSLY!

[JJ-ewlq]

Nice video. Thanks. How do you exclude reimbursements for expenses? Do you just put the expense reimbursements in a different account?

[rhondaault]

Hello Can you tell me how I add a 2nd line for DBA on the 1099 in QBO, I find instructions online for Desktop but nothing for QBO

[mikebicho]

Great video, thank you. Are you able to create the 1099-NEC without the pre-formated forms?

[chucktrotter]

1.7.21 Thanks for the video. Now I know more.

[JJ-ewlq]

One caveat when using QuickBooks online. All your checks through December 31 should be downloaded and mached/added before you generate your 1099 report. Otherwise the checks are not included. Oops!!