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?

QB Desktop Users 1099-NEC training: https://canduskampfer.com/1099-nec-desktop-users/

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.

 

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

 

For more details visit: https://www.irs.gov/instructions/i1099msc

 

Need to send your Nonemployee’s a W9: https://www.irs.gov/pub/irs-pdf/fw9.pdf

IRS 1099-Misc Publication: https://www.irs.gov/pub/irs-pdf/i1099msc.pdf

 

Timestamps:

0:00 – Intro
0:22 – Changes for 2020 tax year
0:59 – Difference between 1099-NEC and 1099-Misc for QuickBooks Online
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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Please comment below and let me know if you’re ready to process your 1099’s now!  👇🏻