Intuit has built a very good “QuickBooks Year-End Guide/Checklist” and it’s included right in your QuickBooks program by going to the Help Menu and choosing Year-End Guide. Over the next few days, we’ll cover each topic listed in the Year-End Guide, and offer some additional tips on each of the three sections: Tasks to prepare for filing taxes, Tasks to do if you use subcontractors, Tasks to do if you have employees and some Tips for the upcoming year.
Tasks to do if you use subcontractors
Ensure that 1099 info is correct – the IRS requires that you issue form 1099 to report Non-Employee compensation of $600 or more and QuickBooks does a really good job of tracking this information for you.
Your first step is to run a 1099 Detail Report by going to the Reports Menu, choosing Vendors & Payables, and then selecting 1099 Detail. This report helps you verify the information that QuickBooks prints on the 1099-MISC tax form. It provides more detail than the 1099 report.
For each vendor, the report lists the individual transactions that contribute to the vendor’s 1099 total. The totals themselves appear in the Balance column. The report shows only the vendors specified as 1099 vendors.
To list all vendors in the report, regardless of their 1099 status, click the 1099 Options drop-down list at the top of the report and choose All Vendors. Likewise, the report shows only transactions assigned to 1099 accounts. To list transactions that may have been assigned erroneously to non-1099 accounts, click the 1099 Options drop-down list at the top of the report and choose All Allowed Accounts. To go directly to one of the transactions listed, double-click the transaction. Verify that all of your 1099 vendors or contractors are listed. You may need to change the status of some vendors or contractors that are currently marked as “No” in the Eligible for 1099 column. Check that all transactions have been correctly assigned to 1099 accounts.
Keep in mind that you may assign multiple accounts to each 1099 tracking box.
Vendor eligibility for 1099 reporting is available in the Vendor Record, Additional Info tab and you are required to have a Tax ID number. Account tracking is available from the Edit Menu, Preferences, Tax:1099, Company Preferences Tab. You will need to purchase preprinted 1099 and 1096 forms.
Print & mail 1099’s – if all of your information is correct print and mail the 1099’s on pre-printed forms OR you can use Intuit’s 1099 E-file service; and eliminate the need to buy pre-printed forms and pay postage.
When you use the Intuit 1099 E-File Service, you can save time and money. You file your Form 1099-MISC information electronically with the IRS with the click of a button. You print your own and your vendors’ copies on plain paper, so there are no preprinted forms to buy. The Intuit 1099 E-File Service supports the same Form 1099-MISC boxes that QuickBooks supports. And for certain states, the IRS shares your e-filed information with the state agency, simplifying your state filings. Fees do apply; however, I believe that there is an “Early Bird Special”, if you sign up by January 23, 2011.
For more information about the E-file Service; from the QuickBooks Vendor menu -> choose Print/E-File 1099’s and look at item #4 – E-File and print on plain paper.
As it stands there are new rules for 1099 reporting, and to be quite honest – I’m afraid I’m not 100% up to snuff on all the changes; I just know that it will mean more tracking and paperwork. Here are two very good articles that should help you to prepare for what’s ahead:
- New Rules About Forms 1099 Are Causing a Stir – by the Tax Girl
- 1099 Rules & Regulations – by The Missouri Tax Guy