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 Desktop
and online
so that you can see the adjustments in there.
The first thing to know is when you're setting up your vendors,
as always, which I've talked about before, you're gonna go under vendor,
vendor center, but we want to always start here,
I have, this as my sample file. So here's the Candus Kampfer example,
you gonna go over here to the pencil,
and you are going to go,
you're gonna make sure that the vendor name,
company name, your address is all accurate, then you're gonna go under tax settings,
this is the key, you want to make sure that you mark it as
eligible for 1099.
If the person is eligible,
and you are gonna make sure they have a tax ID number.
Now this is similar to what we've always done for taxes,
where the big change is gonna happen is when we start linking
and matching up our vendors. So you're gonna go under vendors
forms
print/E-file, this used to talk about the wizard,
it's no longer says wizard now it says print E-file your 1099 forms.
It says are you ready to prepare and you hit yes now,
the first time I click this, it asked me to do a backup of my QuickBooks.
So you may need to do that.
If your form doesn't look like this,
when you do it, you're gonna want to make sure you go under the window under the Help
and make sure you've updated your QuickBooks okay,
then you're gonna
decide whether you need the NEC which is
for independent
contractors or non-employee compensation
or you may still need the 1099 miscellaneous,
which is where you're like your rental income, your royalties,
all the things that existed before in the form still exist,
then you're gonna click get started, I recommend starting with the 1099 NEC,
and then
doing the miscellaneous second,
I recommend setting both forms up and going through the process
it'll show you with mapping
and then
actually processing the forms later,
you can E-file or you can mail them in.
If you have over 250 forms, you're gonna still need to E-file,
the cutoff date for 2021 is February 1st,
for the 1099 NEC,
for the 1099 miscellaneous,
you have to have it to the recipients by February 1st
it's normally January 31st but because it lands on a holiday this year,
you get an extension to February 1st,
the 1099 miscellaneous has to be mailed into the IRS
or electronically file. But if you're mailing it,
March 1st,
if you're electronically filing it by March 31st. Okay,
for the 1099 NEC,
you need to both mail it in
E-file and give it to
the recipients by February 1st this year.
So you go ahead and click on get started.
And then you're going to go through and it's going to have all of the
vendors that you have selected are eligible. That's why we started with that screen first.
So that was under vendors,
vendor center,
everyone who is eligible,
you gonna make sure you click on the pencil,
go to the tax and make sure they're eligible.
Okay, so we started with,
then you're gonna, it's gonna have all of them here.
You can clear them all, you can check mark just the ones you want.
You can also select them all as well.
Then you're gonna click Continue.
And you're gonna have all of your information in here.
If you need to make any changes. You can click on any of the boxes,
double click and you can
make adjustments to any anything that you need to adjust.
If you need to adjust the address or anything like that you can,
I recommend having them give you a W9
filled out, so it's gonna have their
contact information as well as their
mailing address their either
tax ID number, whether that's a Social Security or
an EIN, they'll give you that and you'll have all of the data, you want to keep that in your file.
Once you make sure all of this is accurate, you're gonna click Continue.
And this is where all the magic happens.
This is really we've always had mapping here.
But this is more important than ever to have your things mapped correctly.
Now, every category in here,
you want it to automatically go to box one, you can checkmark that
I do not recommend it.
What I recommend doing instead is going through every account
that you have over here to the left,
and mapping it to whether it's going to show up on the NEC,
or not remember NEC is for non-employee compensation.
So these accounts to the left, if you're wondering like where do these populate from
whenever you are entering a bill
or writing a check
And you're in here writing a check
when you select the account that you want it to go to.
So let's just say the Candus Kampfer example
that we have as a vendor.
And say we're gonna write a check for $1,000.
Oops, let me fix that.
When you're over here, and you're selecting where you want it to write to
so maybe you're you have a subcontractor as your expense category,
cost of goods, or maybe you have professional fees.
And these are all the people that you need to give a 1099 to,
it's up to you
depending on how you set up your QuickBooks, but you're gonna want to make sure
that anybody who gets the 1099 NEC that you know what categories you're using here,
that's the trick, okay?
The account that you're using, whether you're
entering it here or in a bill,
you are gonna find it to the left.
So if you say professional fees, oh, yep, that's one of them.
That's anything that goes there is considered non-employee compensation.
Maybe you have a professional fee, or something like that, maybe labor,
you're gonna say, oh, yep, that's everybody's you're gonna need to know
where those go to.
Okay,
so you're gonna go through, maybe it's subcontractor goes there as well.
Okay
professional fees, subcontractor, whatever, so you go through each of these,
you decide on every line item,
whether or not,
it is omitted, meaning it's not gonna show up on the 1099 doesn't qualify,
or,
Yes, that is what I need in box one.
Or if you have federal withholding that you withheld, or state withholding,
you'll need to allocate the mapping to each of those as well.
So go through and you'll pick each one, whether it applies or not.
Now, if it's like say rent expense,
you will not be able to choose miscellaneous box
until you go to the miscellaneous
1099
Mine is showing up just because I did a training on this before.
Alright,
so
over here is how it's gonna sort which accounts are gonna show up in your list,
you can choose
all accounts, and that's every single account that you have in your whole
chart of accounts,
if you want,
and you can sort it by type,
so that you can easily go through and find it.
Or you can sort it by what accounts are gonna show on the 1099
other words where
anyone who's been paid
in this prior screen that you've selected,
it's gonna show up those accounts that were used in those examples. Okay.
Mine show a lot of different ones, just because I do a lot of different training
with the different people that are in these examples that I've created here.
Okay,
once you've mapped every category and whether or not
it should be considered going to the NEC,
it's either yes or no, basically, if it's no, it's omit, if it's yes, it goes to one of these
three boxes,
then you're gonna click continue
If you need to know more about the threshold,
you need to know it's a $600 threshold, you can, you can check that.
Don't worry about the threshold as much, you don't need to decide if somebody should get it,
you just need to decide if
this expense category,
or this category that you're using QuickBooks,
if it qualifies for the NEC or not. And then you're gonna click continue.
Okay, you're gonna have
payments that are excluded,
you're gonna have payments are included, and these are excluded.
You can also look at your details here.
Now, something important to know,
is if you pay
through a merchant, a third party service, like you use your credit card or PayPal,
because those people when they set their accounts up,
let them know, they give them their tax ID number, you don't need to provide a 1099 to anybody
that is using a third-party
merchant provider.
So if you ever pay through your debit card or credit card,
they're gonna get a special 1099K.
So if when you're paying these and anybody pay with credit card is not showing up.
That's okay. Those are not something that you need to worry about.
They have it somewhere else.
So when you get to the next screen when you click continue,
and you get here and you see okay,
yep, that's under the dollar amount plus technically, Ace Hardware doesn't qualify
of as an independent contractor,
then you'll go to say
Candus Kampfer. Okay, she doesn't qualify,
what are those transactions?
And you'll go in.
And you can always look up
all the transactions that were processed inside your vendor center
for that vendor.
You can double click on the checks and go, oh, yeah, that was payroll stuff
That's not 1099.
Double click on
transaction that happened. Oh, yeah, that's a journal entry. That's a reversing entry.
That doesn't impact that's an adjustment,
double click on the next one, and you go through oh, yeah, we paid for a note payable.
That's not on the 1099
NEC and you'll go through.
So just because
on here, it shows excluded,
you can go back and make sure that it's not mapped to the wrong account,
or didn't go to the wrong place.
If after you verify that, if everything's accurately mapped,
and you feel confident that
you're one person or your 10, or your 100, whatever it is,
is accurate, then you're gonna click continue. Okay,
so this is just verifying who really gets the NEC form, the 1099
or not.
So you have two choices, you can either print
your 1099
by clicking print,
make sure you pick the correct calendar year for what you're looking for,
you'll have who it's for.
And you can print, I do recommend that the first time that you print it,
you grab a white sheet of paper,
mark an x, stick it in and test it. So you can figure out where your form applies,
it's gonna be just like a laser check.
After you've printed all five versions
that you're gonna be giving
the red one is for,
I can, I can show you that in a minute. But the red one is for IRS,
then you have two for the vendor or the recipient.
One is also for the state, and then one is for you to
receive as well. Okay,
so you're gonna print all five versions,
you just click print, and you're gonna print it five times on five different forms.
And then you're gonna print your 1096.
Okay,
the 1096 is the summary, you will need a 1096 for each version
of your 1099 form. So if you have the,
1099 NEC,
you're gonna have that and it's gonna have its own 1096.
And if you have 1099 miscellaneous, it will have its own 1096. Okay,
so you're gonna go through that,
if you want to E-file, you'll click E-file,
it will connect to the internet, it will click connect to
QuickBooks,
which I'll show you, you're gonna
put in, there is a cost, it's $2.90 per form, you're gonna put in
how many forms you have.
So there's two
1099s, to a form, typically.
But in this, when you print them on this, you're just gonna count
each individual business that you're providing a 1099 for
will be considered a four.
So how many of those do you have, you're gonna select that,
and then you'll move forward with entering it. So they know how many that you'll have.
Okay,
the 1096, you don't have to worry about when you file electronically.
So that's the process
if you are a
desktop user, 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 are you're not using the form.
Or if you need to correct them that you mark, this as 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 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 a NEC or a
miscellaneous, which QuickBooks will do when you print it out directly as well
So that's what you're gonna to do for your
1099 NEC.
When you're all done, we'll hit Save and Close. And then let's go back in and talk about
the 1099 miscellaneous.
So the 1099 miscellaneous is right here, you're gonna click, get started.
It will also have your same list of ones that you said are eligible for the 1099.
You're gonna click Continue.
And if you want to link up now your rent expense,
any of the things that go into this list of boxes, there's 15.
If you have anything that categorizes into here, whether it's rent,
if you have, crop insurance proceeds,
if you have, you know gross proceeds from the attorney,
all these different things.
If you want to know more about it, we did a training on that.
which I mentioned before,
that's something we do more inside Confidence with QuickBooks
or our QuickBooks simplified community.
So rent expense,
you click here you go through, if they don't, if these things don't belong,
you want to make sure that they all select as omitted.
Anything that was originally in here that you chose for your non employee
compensation for the NEC,
it will also say it, you cannot change it in here,
because you did that in another screen.
But it does
show it just like it showed rent expense.
When we were in the 1099 NEC, I recommend actually
mapping
everything,
and then going back and printing your form.
So once you feel good about everything you selected,
you're gonna click Continue.
You'll have view payments or exclude just like before,
click Continue, you can print and look at those reports.
If
your 1099 miscellaneous, anything you have qualified, it will let you know
it's included,
will be on the left
excluded or unmapped will be to the right.
You'll notice that none of these technically qualifies.
We didn't have rent in this example.
But if you do,
or any of the other boxes, they should show up here,
you're going to go ahead and click Continue.
Go through print your forms
that you need,
which I didn't have any
or 1096 if you have one as well, or E-file, okay?
The same things apply as far as if you're paying rent,
or any of the categories for
with your credit card, they won't show up either.
Now, something you may want to know is if you go here to vendors,
1099 forms,
if you just want to see like who qualifies and what it is,
if you go under 1099, review 1099 vendors, if you click here,
you'll see every vendor you have whether you say they're eligible or not.
And if they have a tax ID number,
what is their billing information. So that's a great report pull.
You can also pull
the summary and the detail here. And if you want to order your forms,
from Intuit, you can order your forms directly from Intuit if you're not gonna do
the E-file.
So that is the update on how to
process your 1099 forms.
I will do an additional video for how to process them. If you are using QuickBooks
Online
If you're looking for the online version, click on the link above.
And you can find that
if there's a separate process.
So we'll create a video for each.
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,
here on YouTube.
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.