Let's face it, the old way of doing 1099's in QuickBooks has been cumbersome at best... it involved a lot of 'user based work' in order to get QuickBooks ready to figure out the 1099's that needed to be filed. But for this year's filing season, the QuickBooks team responsible for 1099s has done of lot of work to ensure that 1099s can be prepared and filed easier than ever, and with less work by 'users' and more 'intelligence' by QuickBooks.
Now, instead of you telling QuickBooks who should get a 1099, QuickBooks will tell you who should likely get a 1099 based on the payment information already in QuickBooks data. Even so, you still have full control over deciding if QuickBooks is right when it comes to 1099 recipients.
QuickBooks will also quickly advise you as to any missing information that needs to be updated from the records of 1099 eligible recipients. The new 1099 features are already available in all SKUs of QuickBooks within the United States.
Let's review a few more details about this new process.
Potential 1099 Recipients
QuickBooks reviews all vendors looking for those who have been paid more than $600, but at the same time it looks for clues as to vendors* that may not be subject to 1099 reporting. For example, it looks for corporations or vendors paid under accounting categories that typically are not applicable (like utilities). You are not likely to send your electric utility or municipal public works department a 1099.
Missing Recipient Information
If a potential recipient has information missing from their vendor record that must be reported on a 1099, QuickBooks identifies those recipients and the missing information and lets you know. The example below shows you the displayed information.
You can then send invites to those potential recipients who are missing information so that they can log-in (or create a new Intuit account) and submit the required information.
Payment Mapping
Based on the various payments made to recipients QuickBooks determines the most appropriate filing information to populate to 1099 forms. Once again, you are in control and can remove, add, or change the transactions and the related mapping or 'form box postings' for your transactions. Another aspect of this level of automation and control deals with transactions that occur via credit card which are excluded from reportable totals.
Final Review
1099-Preparers have a final opportunity to review and approve all 1099 forms prior to their mailing and e-filing. Based on the state in which the 1099 recipient is to receive the form, QuickBooks will also determine if a recipient has residence in a state that requires a form to be e-filed with the state tax agency. When appropriate QuickBooks will make such filings.
Managing Your Filings
QuickBooks remains the depository for the data and forms filed making the new process not only streamlined but part of your permanent QuickBooks records. Solutions for 1099 filing outside of QuickBooks rely on integration with QuickBooks to obtain baseline data, they require you in many cases to pre-define vendors who should receive 1099s, to then update missing information in either QuickBooks or the 3rd-party solution in order to sync the data with complete information. You must then work back and forth between the 'other' solution and QuickBooks to make sure everything is right and that every vendor is correct with the correct amounts. All of that actually complicates and lengthens the time it takes to get your 1099s ready to file.
The new experience in QuickBooks streamlines 1099 preparation and filing, simplicity and accuracy just make things easy.
Footnote: * - the term 'vendor' as used herein represents both 'vendors' and 'contractors' that may be included in your QuickBooks data.
Disclosure: Content and graphics adapted from Intuit QuickBooks media source content.