If you own a business, it is important to prepare and file your federal 1099s with QuickBooks Desktop.
1099s are nothing but tax forms which you need to file with the IRS when the contractors are paid in cash, direct deposit, or checks.
The importance of tax forms can be surmised by the fact that every successful business venture always meets its tax criteria on time. This not only helps them to build credibility but also helps them avoid any legal restrictions from doing business.
1099s forms in QuickBooks is one of those essential forms that are required to be set up and filled properly for the smooth functioning of your enterprise.
What is 1099s forms in QuickBooks all about?
1099s are identical to W-2 forms but are typically for non-employees. It is necessary for business to issue 1099s to the particular non-corporate service providers for the payments made during the specific year.
This form differentiates between different types of income which may not be classified under a regular job of the particular applicant.
Note: Employees who are not given the W-2 forms are typically issued the 1099 form. They comprise of different types of forms depending on the transactions like Social Security Benefits, Government Payments, etc.
Why do you Need to Set up 1099s Forms in QuickBooks?
It is mandatory for all business owners to file Forms 1099 for specific payments that are made during the year. Such payments include:
- Payment for services like contract employees, unincorporated maintenance people, bookkeepers, accountants, etc.
- Legal counseling fees
- Interest paid
How to Set up 1099s Form in QuickBooks?
Here is how you set up 1099s forms in QuickBooks.
Step 1: Prepare the vendor account or edit it in case it is already created.
Step 2: In the menu bar, select the Vendor and then choose vendor Center
Step 3: Choose the vendor from the vendor’s list or select the dropdown button near the New Vendor left side of the screen and click it.
Step 4: In the new window for Address Info, add the Vendor’s contact details and name.
Step 5: Select the Tax Settings on the left of the screen and add the vendor’s tax ID number in the Vendor Tax ID.
Step 6: Checkmark the particular box that says vendor eligible for 1099.
Step 7: Select OK.
Frequently Asked Questions
Is it Possible to upload Data from Numerous QuickBooks Company Files into the Tax 1099?
Yes. It is possible.
How to Correct 1099s Forms?
To correct them, you need to strictly follow the steps mentioned above.