Changes to 1099-Misc Preparation in Quickbooks Online
UPDATE: The Quickbooks Online team will be hosting a webinar on January 10th at 12:15 pm PT to cover some details on the recent 1099-Misc regulation changes. Further details can be found here: http://community.intuit.com/posts/join-us-for-a-webinar-jan-10-2012-on-the-1099-misc-regulation-changes
An early Happy New Year to all of our readers. I wanted to highlight a few changes to our 1099-Misc preparation workflow in preparation of filing season.
1099k
The IRS has issued new reporting requirements for tax year 2011 1099-MISC form. These requirements will exclude some forms of payments from the 1099-MISC form that will instead be reported on the new third party form 1099-K.
If you’ve made payments to vendors in tax year 2011, you’ll only need to report certain types of transactions and exclude others.
What does this mean to you?
- Payments to 1099 vendors made via credit card, debit card, or third party system such as PayPal will be excluded from the 1099-MISC calculations.
- On the Prepare 1099-MISC screen…
- Navigate to the the Prepare 1099 Forms preview. Note the column titled Total 1099 Payments Excluded. You can click on the total in this column to see an Excluded Payments by Vendor report which shows transaction details. This report can help you verify if payments should indeed be excluded.
For additional information on the new IRS requirements please visit the links below:
- Explanation of final regulations published by the IRS on the new payment card reporting requirements: http://www.irs.gov/govt/fslg/article/0,,id=226894,00.html
- IRS Third Party Reporting Information Center Link: http://www.irs.gov/taxpros/article/0,,id=225080,00.html
eFile
Prefer to electronically file your 1099 forms?
Well, you’re in luck! Intuit’s 1099 E-File Service allows 1099 forms to be filed electronically. For more information about the 1099 E-File Service, see this web page: http://payroll.intuit.com/support/kb/2000864.html.
Want to give it a try?
You can sign up for the E-file service here: https://onlinepayroll.intuit.com/welcome/1099.jsp
Thank you,
Quickbooks Online Team
December 30, 2011 at 4:53 pm
WE HAD NOTHING BUT TROUBLE TRYING TO LOAD QUICKBOOKS. WE WILL RETURN IT THE STORES WE BOUGHT IT FROM.
December 31, 2011 at 6:37 am
You can’g be referring to QuickBooks Online, i.e. returning to a store. This information is for Quickbooks Online, not a store bought application as I understand it.
January 2, 2012 at 5:31 am
I don’t really think the 1099 process is working the way it’s intended. I realize there are new reporting requirements for 1099K but I have several vendors that we pay through our Online Banking institute, such as our rent and janitorial services. These vendors ae showing up in QB Online as a 1099K reporting and it really should be a 1099-Misc reporting. I believe there should be a way of selecting whether a vendor is a 1099-Misc or 1099-K vendor in the vendor’s profile.
January 2, 2012 at 5:52 am
I don’t think you can excludedo those payments. If you paid a vendor money during the year no matter how, you have to include that on the 1099. I attended the IRS Tax Forum this past summer. 1099 K reporting is done by a separate entity. The individual taxpayer has to handle the duplication on their tax return. 1099 k forms will only be issued if there are more than 200 transactions and 20,000 dollars in payments. Issuers of 1099 misc forms will have no way of knowing what third party payers have remitted to the vendors. The irs requires 1099 miscellaneous be issued to anyone you make payments totaling 600 dollars or more regardless of the payment method. What you are changing here now makes it incorrect.
January 2, 2012 at 6:46 pm
Kathryn:
If you look at the instructions for the 1099-Misc they state that certain credit card payments are excluded. See the following document for details of who is excluded http://www.irs.gov/irb/2004-31_IRB/ar17.html
January 16, 2012 at 4:39 pm
The section you directed us to is (a) as clear as mud, and (b) was issued in 2004. It does not address the changes for 2012. I’ve gone all over the IRS website, and nowhere do I see any clear instructions to filers of the 1099 Misc form to exclude items that were paid by credit card. I’ve printed out the 2011 Instructions for Form 1099-Misc and read every stinking line, and it does not explicitly say anywhere to exclude credit card payments from your calculations. The closest it comes is its reference to Form 1099-K, which directs you to “See the separate instructions for Form 1099-K” which I reviewed thoroughly. Nowhere does it explicitly state that 1099-Misc filers are to exclude credit card payments. Given the lack of clear instruction, and the penalties for failure to follow the (unintelligible) rules, I will NOT be purchasing additional software, and I will NOT be excluding any credit card payments from my totals. I believe this to be a misinterpretation on someone’s part that has been promulgated to all and sundry in error.
January 16, 2012 at 6:38 pm
As an accounting guru, myself, I am going to have to side with Kathryn here. As a CPA, why would you direct her to outdated info when her question is pretty obvious? The IRS rules are absolutely unintelligible and added yet more complexity. Nevertheless, as far as QB and Intuit are concerned, they are incredibly irresponsible and confusing on the issue of 1099s. For example, what about bill-pay payees, where your bank either pays them electronically or sends them a physical check. Is your bank going to send a 1099-K to them for those amounts? This 1099-K thing will be abandoned as fast as Congress wasted FTE taxpayer-paid hours sneaking it into the health care bill. Some people use different methods to pay the same vendor. Nothing at all in the IRS regs about that, just as there is nothing saying whether using your own bank’s bill-pay is considered a third party electronic payment, especially since sometimes your bank sends a physical check when you use bill-pay. Worse yet, is the fact that some vendors are going to get 1099s for the same revenue – thus overstating what they have to report on their tax return because people are going to cover their butts and just send them 1099 misc for all payments. I have used either QB or TT since QB 1.0. That’s right, 1.0, which I still have on floppies. They have gone from the best to the worst imo. I want to still like Intuit, but the company clearly puts its profits first.
The bottom line, Kathryn, this is what you do:
1) Sort your vendors by amount with the highest first.
2) Exclude the credit card, debit card, paypal payments from those >=600 and generate another report.
3) Use filetaxes.com or some similar site that does the 1099s for 5 bucks a filing – ie whether you have 2 or 20, its 5 bucks, I believe.
January 18, 2012 at 9:46 am
I am not an expert – but also started looking for information whether bill-pay payments should be reported on 1099-misc or whether they would be included by the bank on a 1099-K. I found this document:
edocket.access.gpo.gov/2010/pdf/2010-20200.pdf
On page 49823, there is a section called “Electronic Checks, Bill Paying Services and Other Electronic Payment Acceptance Products. This is a summary of input the IRS received in drafting the Section 6050W rules (which is where the 1099-K is described). And they say with bill-pay it isn’t clear.
Here are a couple of sentences from that document and section:
“Whether arrangements involving electronic checks, bill paying services or other electronic payment acceptance products fall within the statutory definition of “third party payment network” depends on the facts and circumstances. For example, a customer initiated bill payment by means of an electronic check from the customer’s bank account to the merchant is merely an electronic transfer of funds from the buyer to the seller that would generally not meet the definition of a third party payment network…” So, this is an example of where a 1099-K would not be sent by the bank. The paragraph right after this (which is too long to quote here) gives then an example of where a 1099-K would be filed.
Again, I am not an expert, but at least this document provides some examples as outlined by the IRS for when a bill-pay transaction is or is not considered a third party transaction.
January 18, 2012 at 3:27 pm
Thanks for this information. I used this site this afternoon. I loved it. I just had 5 1099 Misc. to print, the cost was only $22.95 and they mail the forms to each individual also the IRS. It was a little scary at first. You cant print your forms until you get to the end and make the payment, then you have every oppertunity to print all the forms. If for any reason you close the site, just log in again and all you information is still there to print. I paid over twice as much to Q/B and I couldn’t even use the forms. I hope I can get my money back.
Christina
January 18, 2012 at 3:29 pm
Sorry, the site is FILETAXES.com
Christina
January 3, 2012 at 11:46 am
It would be great if we could print 1099 forms on blank paper and file electronically directly from QB online. I don’t see why we have to register on another QB site and then move our data over to this site.
January 4, 2012 at 7:30 pm
Classic Intuit OVERSELL! Why is the Quickbooks ONLINE Team pitching this service when it only syncs with the desktop version of Quickbooks?. QB Online users will have the joy of keying their 1099 data manually. Somehow that piece of pertinent information isn’t to be found in the blog post.
January 6, 2012 at 5:14 pm
How do you mark a payment as paid via PayPal? I tried asking this question to a support representative and they starting talking about changing payment types received from clients. WTF does this have to do with anything? Please hire competent and American support representatives for Tax related questions.
January 9, 2012 at 8:37 am
Hi Eric,
I tried to use the same “codes” as Intuit issued for the desk top version. I used DBT and it worked so please try PayPal. If using one of these “codes” the 2012 version will recognize it as an ” excluded” payment and put it in a separate box.
INTUIT: When recording credit card payments using a Bill Payment Check or Write Check form, assign these in the check number field:
Debit Debitcar DBT
DBT card DCard Debit cd
Visa Masterc MC
MCard Chase Discover
Diners PayPal
January 6, 2012 at 5:34 pm
Quickbooks Online allows you to print 1099-MISC forms, but conveniently does not support you to print 1096 forms. You also have to use a completely different website if you want to use the e-file service, which requires a completely new account and you have to double entry all the information. Oh, and that costs $25.
It was exactly like this last year. Absolutely crap. I can’t believe I am “stuck” with this service.
In addition, you can’t find any information about filing the new 1099-K. Support reps don’t even know how to adjust PayPal vendor payments so they are not included in the 1099-MISC amounts.
Fail Fail Fail
January 10, 2012 at 8:42 am
I printed 1099-misc from quickbooks desktop when I printed the 1096 form it was placing the 1099-misc check box in the 1099-k box. Tech support wanted more $$$ just to answer a question on how to change the check mark to the correct box. I’ll refer my clients to a different tax program.
January 13, 2012 at 4:14 am
I just tried using the 1099 e-file service and it loops me to authorizing an e-file service that works with Quickbooks 2009 for Windows. Surely there is a big mistake here.
In addition the service sells for $25 if used by 1/15, more after. I can’t see myself completing this right now.
Last year this process was a total nightmare because the forms wouldn’t align. I just wish one year it will be a simple click.
January 16, 2012 at 3:34 pm
You can download QB online to desktop QuickBooks and do the 1099 Forms using that software.
January 17, 2012 at 12:42 pm
DESKTOP 1096 FORMS ARE MARKING THE FORMS BEING FILED AS 1099-K WHEN THE 1099 MISC. BOX IS SUPPOSED TO BE MARKED. I HAD TO REENTER INFO IN A DIFFERENT SOFTWARE AND PRINT THE FORMS FROM THERE.
January 18, 2012 at 12:22 pm
I just updated my on-line package of Quickbooks to complete my 1099-Misc. All the work is done but it will not print correctly. The top name lines up but the second one does not. i have contacted Intuit twice and they have sent my needs to another step up. I just paid to upgrade, bought all intuit forms to make sure they worked, and will probably have to print by hand all the information. I want my money back from my upgrade for the sole purpose of completing my 1099 myself.
January 19, 2012 at 8:10 pm
I tried signing up for the 1099 e file for quickbooks online (with payroll). It did not list any companies in the list of company names to choose from, so I clicked the only available option of using a different company. Then quickbook online comes up and says I am logged on to 2 companies at once and have to close one. I cancelled the new subscription to the new company and tried to sign up again using our existing company but it won’t let me sign up because it says I am already subscribed as this new company, which won’t let me do anything because it says I cancelled. There is no phone number to call and no where you can send an email to. The chat only goes till 6 PM but I have to do this in the evenings. They shouldn’t advertise as being able to efile your 1099s if it won’t really work with quickbooks online.
January 20, 2012 at 9:18 am
Does anyone have a work around for the bottom 1099 form not aligning? Will it work if I download to QB 2012? I’m on a Mac using Google Chrome. Does that matter? This should NOT be this difficult!
January 20, 2012 at 11:24 am
I had the same problem. I spoke to the support staff at Intuit. They had the same issue. They sent it to their technical team which has not fixed the problem. I ended up finding a word template on line for the 1099. Then entered the information in a spreadsheet and did a mail merge to print the forms.
January 26, 2012 at 10:24 am
I don’t know if this will help – I use a Windows Computer and Google Chrome…but my 1099 bottom form did not line up when I tried printing from Quickbooks Online. What happened was that I had to print to a pdf file and then open the pdf file to actually print the forms from there. When I printed from the pdf file, I had to de-select the “auto rotate and center” box, use “page scaling – NONE” and select the box next to “choose paper source by pdf page size” – when I did that it printed on my forms perfectly…..
January 28, 2012 at 1:24 pm
I’d like to use the word template – please let me know where you found it. Thanks so much!
January 20, 2012 at 3:15 pm
Just realizing how much of a pain this is going to be for bookkeepers with multiple clients, especially those on old versions of the software. Some of my Mac clients aren’t able to upgrade due to the limitations of their computers vs. the requirements of OS Snow Leopard and Lion. Looks like I’m going to have to send them all emails asking how they paid all their contractors… Oy.
January 26, 2012 at 5:52 pm
Tweaky question: I know that the new 1099-K is supposed to be for contractors paid via credit card, ATM card or PayPal, but what about vendors paid via online bill pay? Since they’re actually receiving a physical check, my guess would be that they would be getting a regular 1099-MISC, but does anyone know for sure?
Thanks,
Cat
January 26, 2012 at 7:05 pm
Here’s another discussion of this subject, but the answer is still not definite. http://www.taxalmanac.org/index.php/Discussion:1099-k_or_1099-misc
January 27, 2012 at 4:31 pm
I got off the phone with the IRS and have an answer: online bill pay is still 1099-MISC, not 1099-K. This is very good news as it uncomplicates things a bit.
February 11, 2012 at 11:22 am
I found my license number and now I still can’t log in. Give me a freaking break!
February 15, 2012 at 2:45 pm
Can’t print 1096????? What’s that about. Disappointed in QB Online.
May 15, 2012 at 1:23 pm
I have not had the chance to do 1099′s for clients with the QuickBooks online version although I have done 1099-MISC & 1096 forms for some years for a couple clients using their version of Qkbks. Pro. We have about 10 years of versions of the Quickbooks Pro for clients over the years. With the software Qkbks. it still is necessary to order Forms & if the Chart of accounts & Vendors are properly setup for 1099′s it can then be helpful to prepare through Qkbks. for large numbers of Vendors who need 1099′s (i.e. 10 or more.) See our blog page for 1099 reminders: http://www.murraycavanaugh.com/blog.php
We use a 3rd party software to prepare most 1099′s but even then, the quickBooks 1099 reports can be helpful in determining the amounts to enter per vendor for the calendar year. We are still filing paper versions of 1099′s because the numbers of 1099′s for clients are still small in quantity.
June 11, 2012 at 11:16 am
Great roundup and list of tips here. Despite years of experience I always have trouble with comment design in terms of inspiration and usability. Just seeing other examples and reading best practices straight-forward is always helpful.
1099 Software
June 26, 2012 at 3:19 pm
Hi! There is a perfect service for fillind documents online. You can find 1099-MISC right here: http://www.pdffiller.com/278740-2011-federal-1099-misc-2011-Form-1099-MISC-Various-Fillable-Forms
Check it out)