No one enjoys tax season, but as a small business owner, it can be especially stressful.
One of the most important things you need to do at the beginning of each calendar year is send out reporting forms to your employees and the IRS. If you pay non-salaried employees, contractors, or a variety of vendors for services, you will likely need to send out 1099-Misc forms to report these non-employee wages.
Luckily, Quickbooks Online is prepared to help you out, and we’re going to explain every step!
If you haven’t kept your books up to date for the previous year, you won’t be able to send out any forms for tax season. If you need help with that, you can check out our guides to bookkeeping basics in the blog section.
Once you’ve got all of your accounts reconciled and ready to go, double check that all of your transactions have payees filled in - this is crucial for the reports you need for your 1099 forms!
QBO offers you the ability to file your 1099-Misc forms online, which saves you a lot of time. You can also print and mail your forms, but you must have the appropriate printing forms ordered.
You can also save yourself some time by making sure that you have all the appropriate information for vendors and contractors that you need to send a 1099 to:
To take advantage of the 1099 filing feature in QBO, you must tag vendors as a 1099 vendor or have added them as a contractor. If you have not done this, you can click Add From Vendor List and select the appropriate people.
To get started with your 1099 preparation go to the Expenses tab on the left side and select Vendors. In the top right side of your screen there will be a Prepare 1099 button.
Let’s get started!
QBO will prompt you to review your company details to make sure that everything is correct.
Now you choose which boxes on the 1099 form you are reporting payments for and select the appropriate expense account from your Chart of Accounts that you have been categorizing it to.
The most common boxes for small businesses are box 7 (non-employee compensation) and box 1 (rents).
Now you have the chance to review everyone that has met the threshold to file a 1099. Make sure that all of their personal information is correct.
If you are missing vendors, you have the chance to edit their information and add people as 1099 vendors.
Once you’re sure that you have all of your vendors and contractors, review the payment totals in each box. If they look different than you expect, you made need to review your transactions or vendor details again. Payments made with credit cards are not included in your 1099 form and they will be reported by the credit card company.
Now you’re ready! Go ahead and click on Finish Preparing 1099s!
For a fee, you can use QBO to electronically file your 1099 forms instead of having to buy the specialized forms, print, and them mail them to the IRS and your vendors. If you want to send them yourself, select the I’ll File Myself option after you have completed your 1099 forms, otherwise select Go to 1099 e-file Service.
You’ll have one last chance to confirm the information on your 1099 forms is correct. This will also tell you the status of your 1099 forms once you have submitted them to QBO for e-filing.
QBO will charge you for the number of forms that you file electronically and for download.
You can allow QBO to securely give the 1099 information to other programs, allowing your contractors to import their data. If you are e-filing 1099 forms, QBO will send your contractors their 1099 form copy by email. You are required to provide your contractors with a 1099 form.
You can now view or print your completed forms. Once you submit the forms for electronic filing you can no longer make corrections or amendments through QBO, and must file a manual amendment.
Your 1099 forms have been filed, your employees and vendors will be able to pay their taxes, and you’ve reported your payments to the IRS.
You’ve finished the first big hurdle of tax season as a small business owner and you deserve to feel productive!
2019 is flying by and February is already knocking on the door. If the stress of tax season is looming, don’t worry, we’re covering the changes you should expect for your 2018 taxes and how to be a tax season superstar! Don’t forget to visit us in our Facebook Master Group for extra support and to tell us what your least favorite part of preparing for taxes is. Maybe you’ll find the answer you need!
Disclaimer This article presents general information and is not intended to be tax or legal advice. Refer to IRS publications and discuss possible tax deductions with your tax preparer.
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