Hassle-Free 1099 Online Form Preparation and Printing

Determining the right vendors

Go through your expenses’ list and see what kind of expenses you made and to whom. Remember: if you paid a non-employee – in other words independent contractor – over the state regulated $600 during the closing tax year, that person will have to be included in your 1099s. In this case you have to enter the vendor’s Social Security number (SSN) to his/her individual contact info.

QuickBooks Online has a clever way of selecting 1099-involved vendors: it has a box you have to tick and when you are ready to prepare your documents, your selected vendor who satisfies predetermined criteria will automatically be added to the 1099.

Xero, on the other hand, suggests you to create a group for the non-employees.

Setting up rules

Each time you know that you are paying a non-employee you have to set certain rules. You have to do this in order for the accounting solution to select only those vendors who match the criteria. For instance in Xero you have to determine who received the payment, what was paid and how would you like to report that in your 1099 – which will always be Box 7: Non-employee Compensation. Or, like we mentioned before, you can create a group specifically for your vendors to be included in your 1099s and report different 1099 payments by creating new rules.

In QuickBooks Online when you are preparing 1099s the Non-employee Compensation box actually drops down and reveals different payment categories. Select a few of them and then the software will enlist all vendors who match the given criteria – so in other words, you can determine which expense you want to report. Then all you have to do is check whether the details are ok and your vendors are ready to be listed in the 1099.

Adding vendor bills

Now this is really simple as you usually receive vendor bills via email. You just have to upload it to your accounting software, add it as an expense by adding the contractor’s name, matching it with a 1099 rule, fill out the bill according to the vendor’s bill and then save. Really, that’s it.