I thought it would be fun to create a new, updated 1099
training for you, because there are some changes.
So let's get in, I'm gonna share with you
what to expect, if you don't know,
there's been some updates and changes to the form.
So there's not only the 1099, there's now the 1099
NEC
So let's talk about how to prepare for your year end
with some updates that you're gonna need to know.
So let's go through some basics about changes,
and then we'll jump straight in to QuickBooks.
So the first thing to know is,
as of the 2020 tax year,
there is a new form
that replaces the old 1099
miscellaneous as far as only box seven is concerned. In other words,
the amount that was formerly box seven on the 1099 miscellaneous,
as of 2019, and prior is now box one,
on the 1099 NEC.
There's some other changes as well, which you can find out more about later.
One thing to know is that
the 1099, NEC is specifically reporting
non-employee compensation,
so subcontractors independent people,
whereas
any other compensation is still on the 1099
miscellaneous, I did a whole training on this
inside for my Confidence with QuickBooks community
and my simplified. So if you're looking for more training, that's
a great place to start. But I wanted to give you at least some
of what you'll need to be able to
get those things answered. So let me go in and share with you
my screen and I will share with you QuickBooks Online,
so that you can see the adjustments in there.
So let's get started.
So inside, the online version, you have a couple different ways to get there.
So you can go here under expenses,
you can click on the vendors,
and you can choose to prepare your 1099s
Or you can come over here under payroll
and click on contractors.
And you'll see prepare 1099s, it doesn't matter which way you go about it.
I'm going to quickly because this is a sample file,
I'm gonna write myself an example check just so that we can
see the process of this, so I'm gonna go in and write a check.
So you kind of see the behind the scenes of what happens.
So I'm gonna go in and I'm gonna create a Candus Kampfer
vendor
And I'm gonna write myself a check. Now remember,
1099s are all based on the date that it's paid.
So I'm just gonna write it for the first,
I'm gonna do it to subcontractor,
just so we can have a subcontractor in here.
And I'm gonna set it up as a
cost of labor.
And that's it.
Okay, so you should already have
yours added in here most likely you've already been paying
your independent contractors throughout the year.
Either way,
you want to make sure all of your transactions are in
before you process your first check.
Now, you'll notice I paid it but doesn't show up here.
So what I need to do, and you'll need to do
for every vendor that you want to make sure that you added,
you want to go into your vendors here,
click on vendor,
and you'll want to open them up.
And you'll want to make sure that you click on Edit,
and you mark them down here as track
1099s
for NEC and then you're gonna want to add in
their tax ID number that they gave you from
their
W9 or whatever you have for them,
you also want to make sure that you have a mailing address
typed in some information, you want to make sure this box is checked.
So even if you put the ID number,
but you don't check it you got to make sure the box is checked.
That's really the magic.
And you're gonna click save.
So you want to make sure that everyone that you want to give a 1099 to
has that box checked.
Now when you go back in,
and you want to prepare your 1099s or if you go under here,
like I was saying you go either way,
you'll see both listed.
This is different for the online version. When you click add,
you can, you can actually add 1099s here where they can
you email them and then they add their profile if you want to.
Otherwise, you just can
add them as you have been paying them and then get the data from their W9
If you don't have the data, but you know that they're gonna be eligible,
you can checkmark them
because they reached the $600
limit
So we're gonna go ahead and prepare 1099s
here
Actually just click directly on it. And then it's come,
it has like some frequently asked questions that you can ask,
but then you click Continue.
And you're gonna go through so the first step, let me go back one step.
The first step I had to kind of prepare because this a fake file
so it didn't have all the data so I put in some random numbers,
but you'll have, need to make sure your legal
entity name is in here.
Your
tax ID number and your business phone number
are in here.
Then you're gonna click Next.
And this is where you do your mapping.
So
it will probably have nothing checkmark because you've never been in here before.
Most likely in this screen. It's new,
a newer version.
So
for non-employee compensation,
you're going to checkmark the box,
and you're gonna find your stuff.
So if you have a subcontractor,
you're gonna set that up
whatever expense categories you had
gonna go through, and you're gonna check mark each
individual one.
Okay?
So if you go in here,
and you scroll through,
you will have everyone
that you needed
to have, like, if legal and professional was one of the ones that you needed.
You'll notice that as you start checking them, the names populate to the right,
you'll go through and you'll check each one
that applies to the 1099.
NEC
A,
it doesn't, don't worry about whether the person met $600.
Just focus on
the category that you paid them.
Okay.
So what's interesting about the online is it takes what's most common,
and puts both of them at the top
instead of separating them by form.
But if you look to the right, it will tell you what form,
so right here it says 1099 NEC
right here, it says 1099 miscellaneous.
So when you click on rents,
then you can come in here and you're gonna pick like rent expense.
Okay,
so you're choosing
what you want,
if you have a bookkeeper,
that you also need,
it populate to the right once you have more than one, that's how that works.
Okay,
cost of labor
You got to make sure it's not employee
considered expenses legal, we'll just add a couple there.
Okay, so you can, you can pre do all of your
boxes that it applies to you, if you have
federal withholding that you withheld.
For either the 1099 miscellaneous, or the 1099 NEC
You would, you would pick the appropriate one,
because you'll see it labels everything to the right,
which form it belongs on, then you're gonna click Next.
And it's gonna give you
who qualifies
Okay,
so there you go. That's who qualifies,
you can either save and finish and come back,
add from vendor list. So if you click this,
it's gonna go through all your different vendors,
if you feel that someone else qualifies,
that wasn't originally added, let's just say it's this one,
and I hit save,
it will then add that person as well into
your list.
Okay, so you can if they're not showing up, but they need to be in there, you can click add
then you're going to click Next.
And it's going to tell you
where it belongs, so
Candus is gonna be on the NEC
Melanie Hall because she's properties and rent,
she's gonna go under the rent,
because we paid her at least 900.
Now, this is gonna tell you
which 1099 contractors meet the threshold
1099 contractors below the threshold.
And 1099s not marked as
contractors not marked for 1099 in other words, they weren't marked,
what it's gonna tell you is
who they are,
how much they received in payments,
and where it would what
how much of what you paid them would qualify for NEC
based off the categories that you've selected.
So you scroll through,
and it will have NEC at the top
and it will have the 1099 miscellaneous at the bottom.
Okay,
so if it qualifies, it will have it in there,
you can click Print sheet,
and it will go through and it will print the sheet for you to look at.
Okay
So
if you see that you need to make any changes or adjustments,
you could click save and finish later.
Third, just before but I'll remind you
that it needs to be at least $600 threshold to get a 1099
And that third parties paid through a credit card or PayPal
is gonna be excluded from 1099s,
okay.
And it tells you why we are talking about because the merchant.
So
once you feel that everything here is accurate.
You have
in that, that meets that threshold, everyone that you think meets
you can click finish and prepare 1099s.
Okay,
then you can E-file by clicking E-file.
It's gonna say
this file doesn't exist because this is a fake QuickBooks file.
But yours would go through and it would sync it over to you.
If you want to print it. You could click print here.
And it's gonna walk you through printing first your 1099 NEC.
It recommends loading blank paper,
Printing your sample on blank paper.
Once it looks the way you want it to look.
Does it line up or not?
Yes, it looks good. You're gonna click yes, looks good.
So you would click Print sample first.
Print your sample,
match it up to your paper.
Then you're going to click yes, looks good.
And then you're gonna say which form is it your 1099 for your NEC,
view your contractors.
It's just gonna be me as the example.
And then you click print forms.
You're gonna put your form in and then you're gonna click print at the bottom right.
Okay,
you're gonna do that for each copy that you have.
There's five so you're gonna do for all five,
and then
you're gonna go to your 1096
1096 for your NEC, the summary page
its gonna have your tax ID number
or Social Security, say like which type,
your phone number, your contact information, this is all
not legit stuff, but then we're gonna click
print on
a 1096 form,
it's gonna bring up what it looks like. So it says this is your
address,
I can show you what a 1096 looks like, it's right here.
So this is, I had these up to pull to show you later, but
basically,
this print
right here, see, how it says the name,
phone number, the email address,
and it has a checkmark there.
That checkmark
is saying that it's
goes to this box, 1099 NEC,
or 1099 miscellaneous.
And the reason there are different forms,
and you're gonna use them different for each 1096
is because the x is gonna go in a different place.
And you only submit one type per form, okay?
E-filing you it, you don't need a 1096 because it, it sits
submits it electronically, so don't worry about it.
So you're gonna print your 1096.
So you have
every person has their own 1099
top or bottom, you separate those.
And then you're gonna have one summary that's red,
that is the 1099. So it looks like this.
This is their 1099.
Okay,
two to a page.
On the red copy, you do not
separate these,
but when you get to the other versions, you will, we'll talk about that in a second.
Okay,
so 1099, you print 1096, you print
the 1099, miscellaneous, the 1099 miscellaneous.
And then if you want a summary, you can click summary.
And you're going to print
the summary.
It's gonna have like, what is the different forms?
How many did you have? What was your total,
okay?
Sound good?
When you're done, you click Next.
And you click, click Done.
And then you're done.
You need to you can always go always back,
allocate all of your different forms,
you don't have to do this all at one time.
You can do like part of it, come back, do part of it, come back
until you're completely ready to actually print them.
So this is your 1099 miscellaneous, you can read all about it
if you want to know like, okay, can you give me more details
about everything which forms,
what boxes, all of that you can get more details at the IRS website,
if you want to kind of look at what the 1099 form looks like.
This is what the new 1099 NEC looks like, this is the box one
for the non-employee compensation.
And then you would go through
make sure that if you, there's two to a page, if you're printing them,
make sure that you void, any that you're not using the form.
Or if you need to correct them that you mark this is corrected,
this is the A copy that goes to
IRS,
you have the state copy, if you need to provide it to the state for your
independent
non-employee compensation
form
then you have the B which is gonna go to the recipient,
you are also going to have the
copy 2 which is also gonna go the recipient.
That's why I said you're gonna print the same thing five times
just on different sheets
that go to different places.
And then this is your copy, make sure that you take a photocopy of the
A
as well as your 1096 that you filled out that you signed as well.
So you'll mark whether it's an NEC or a
miscellaneous, which QuickBooks will do when you print it out directly as well.
Thank you for being here. Let me know below.
What was your favorite part was this like? Aha, you can now handle your 1099s.
Let me know that as well.
And if you
enjoy my tips and tricks, make sure you subscribe to our channel.
And leave us a comment let us know what is your favorite.
We will be doing workshops starting this month in January.
So if you're wanting to learn more about QuickBooks
and you want more support and help,
feel free to join us on one of our workshops,
you can go to CandusKampfer.com/workshop
or click on the link here.
You will see it and I look forward to seeing you inside our next video.
I hope this helped you
and go out there and crush your 1099s.
Hopefully it's not so overwhelming. Just know you need the 1099 NEC
for all of your original box seven
that you used to do on your 1099
miscellaneous that's just no longer there.
Have an amazing day and I look forward to seeing you inside our next tip and trick.
Bye