Archive for January, 2013

How to File Your 1099 and 1096 Forms Using Quickbooks Online: A Step by Step Guide

January 25th, 2013

Let me set the scene: It's January.  Your 1099s have to be mailed out in five days (1099s must be mailed out to vendors by January 31st).  And, you have NO CLUE how the hell to make, print, or file them with the IRS and send them out to your vendors. WHAT DOES A NORMAL PERSON WHO IS NOT AN ACCOUNTANT, TAX GUY, OR QUICKBOOKS WIZ TO DO?!?!?!

Look no more. Here you go. Here is a step by step guide of how to file your 1099s (and 1096 summary form) using Quickbooks Online. I'm sorry if your Quickbooks version does not allow you this functionality (because I'm sure some don't). All I can say is... maybe it's time to upgradeee SON!

Here's how to file your 1099 forms (and 1096 summary form) using Quickbooks Online. Follow these steps:

1. First, go to Staples (or your local office supplies store) and buy a packet of 1099 forms (which should come with 2 1096 forms within it). I typically buy the packet of 50 1099 forms. It will have sheets of Copy A (which are sent to the IRS), Copy B and Copy 2 (which are sent to your vendors), and Copy C (which you will keep on file as the business owner). All of this will come in one packet, with shrink wrap around it. Also, while you're at it, buy the envelopes that go with them (they are bigger than normal envelopes and say "IMPORTANT TAX RETURN DOCUMENTS ENCLOSED" in a black stripe on the front). They also have two big cutouts (one on top of the other) on the left side of the envelope. Buy some stamps, too! Bring the forms, envelopes, and stamps back to your office. IT'S GAME TIME.

And now my friends, I'm going to geek out a bit and get to the real boring (I mean FUN! stuff).

2. K. Fire up that laptop of yours and open up Quickbooks Online.

3. Hover over the "Vendors" tab (top of page) and click on "Vendor List" when it appears.

4. Scroll ALL THE WAY TO THE BOTTOM of the "Vendor List" page and click the blue button in the left corner that says "Prepare 1099-MISC Forms." You are now in the section that will allow you to prepare and print your 1099 forms. WOO HOO! You're on your way!

5. Go to section 1. It will say "1. Set up Vendors and Accounts." And click on the button that says "Assign Accounts." A thick box will pop up. Click "Box 7: Nonemployee Compensation." Then click the arrow next to "Select Multiple..." from the box on the right. Then click the actual word "Select Multiple...". You now want to go into the box that says "Select from List:" and find all of the accounts within Quickbooks that you know people or companies who should be receiving a 1099 would fall under. For example: your lawyers should receive a 1099. SO, in the box on the left titled "Select from List:" you should find the account that you use for Legal Fees and click the blue "Add >" button to move it to the right box titled "Include in 1099 Box:". Find the account for "Consultants" and move that to the right. Find the account for "Accountant Fees" and move that to the right. Find any and all accounts that you know would have been tagging any type of contractor dollars, and move those accounts (lines of text) to the right by clicking that blue "Add >" button. Then click OK. Then click OK again to close out the thick box.

6. Now. Move to section 2 titled "2. Preview 1099 and 1096 information". Start looking at your list of vendors (vendor names, addresses, and Tax ID:#s should have populated on the screen). Wherever there is a red line of text that says "Missing Tax ID#," or "Missing Address," or "Missing Name," or anything like that, you need to click on the red text and add the necessary info (into the thick box that pops up). Click save on the thick box after the info has been added. And repeat this until there are no more "missing" items. Also check to make sure that your own company name, address, and EIN number are included. If any of those are red it means your missing information and need to click on it, edit it / add it, and save it.

7. Now. Do you see the box in section 2 titled "Show: 1099 vendors that meet threshold." It's on the right side of the screen. Click that box and replace it with "1099 vendors below threshold". This list contains vendors who either were not paid $600 or more in the past calendar year (which is a requirement needed to 1099 the person in the first place), OR vendors whose expenses were attached to an account that was not included in the list of accounts you chose from the "Assign Accounts" section in section 1 above. IF YOU BELIEVE that one of the vendors in this list SHOULD get a 1099, it is probably because that expense comes from an account that SHOULD be added to the right box in the "Assign Accounts" section. In order to fix this, go back into "Assign Accounts" (in section 1) and "Add >" the account to the right hand column. Click OK and OK again. After doing this, when you go back to the 1099 screen, this name will no longer be on the "1099 vendors below threshold" list, but will instead be on the "1099 vendors that meet threshold list" (if they made over $600 last year). Go through your lists multiple times. Make sure that EVERYONE you want to receive a 1099 is now on the list when you click "Show: 1099 vendors that meet threshold."

8. IF you have everyone accounted for, and if all of their information is collected (no Tax ID#s are missing, no addresses are missing, etc)... then it is time to set up the printing.

9. To print, scroll down to section 3 titled "3. Choose how to file" and click the button that says "Print Sample 1099." A sample 1099 page will come up. Take this paper and line it up with the REAL 1099 forms you just bought from staples. Use the grid tool to adjust the text on the page up, down, left, or right to make sure they line up. Please, make sure your printer prints them the correct way. You should test and retest multiple times using blank pieces of paper. The last thing you want to do is print up all your forms the wrong way and have to trash them and go and buy new ones at Staples. You're now ready to print FO REAL!

10. If you need to print 20 1099's, load the printer with 10 1099 forms (two vendors will print on each page). As I mentioned earlier in the first paragraph of this blog post, your packet of 1099 forms will have come with four separate forms labeled Copy A, Copy B, Copy C, Copy 2 on the right hand side of the forms. Separate these forms into four separate piles. Make one pile for Copy A's. Make a second pile for Copy B's. Make a third pile for Copy C's. Make a fourth pile for Copy 2's. You will need to print FOUR SEPARATE TIMES so that you have four identical copies of 1099s, one for each form type (A, B, C, 2). Go to the printer and load one pile into the printer. Then go to your computer print up your first pile of 1099 forms by clicking on the blue button at the bottom of the page labeled "Print 1099". Then, keep them in separate piles and put them on your desk or work station so you have room to work with.

11.After you print up your four separate piles of 1099s, you match up Copy 2 and Copy B one vendor at a time and put them together into the envelopes you just bought and mail them out. For example. If one of your vendors is named Ryan Durkin... you should have one Copy 2 form with "Ryan Durkin"'s name on it and you should have a Copy B form with "Ryan Durkin"'s name on it. Put BOTH Copy 2 and Copy B TOGETHER into ONE envelope. Seal it. Stamp it. Put it in the mail. Do this repeatedly for each vendor you have until all of the Copy 2 and Copy B forms are in their respective separate envelopes and in the mailbox. You have successfully now mailed all of your vendors their 1099s! SUCCESS! But wait... there is still the IRS who needs to get THEIR copies.

12. What you should have left now are all Copy C forms and all Copy A forms.

13. You need to take all your Copy C's and put them in a safe place. Those are yours (as the business owner) to keep. I put mine in my safe in a folder labeled "2012 1099's."

14. All that remains now are your Copy A forms. These are going to go with your ONE 1096 form, which is a summary form that will sit on top of your 1099 A forms. And these are going to be mailed to the IRS.

15. To print your 1096 form, print a test page using the button "Print Sample 1096" located on your Quickbooks screen in section 3. Print off the page. Line it up to your 1096 form you bought from Staples to make sure it fits within the boxes. Then print the real 1096 form by scrolling to the bottom and clicking the blue button labeled "Print 1096". Sign the 1096 form, put your title on the form, and date it. Then put this form on top of the 1099 Copy A forms and this entire packet should be mailed in its entirety to the IRS at "Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301."

That is how you make, print, and file your 1099 and 1096 forms using Quickbooks Online.