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Common Causes for Incorrect Amounts on 1099s

1099s help.png



With the deadline to send 1099s right around the corner, we have pulled together some of the most common reasons for incorrect amounts on the form along with information on how to identify and fix them.



If you still have questions, please check out our article about how to prepare and send 1099s using QuickBooks Online .




Total payments for the vendor don't meet the filing threshold

For each specific box on the 1099, if the total amount in that box for a vendor doesn't meet or exceed a specific threshold amount, a 1099 is not required, and QuickBooks will not include this in the 1099s.


If no boxes for a vendor have payments that meet the threshold, the vendor will not show up on the "Review" step of "Prepare 1099s".


If some boxes do meet the threshold but other boxes don't, then the vendor will be shown, but only the amounts that meet the threshold will be shown.


Note: Box 7 and most other boxes on the 1099, the filing threshold is $600. Box 2 and Box 8 have a threshold of $10.






Vendor is not marked as a 1099-eligible vendor

In the vendor's info, make sure "Track payments for 1099" is checked.


You can find this for a single vendor by:

1. Go to Expenses and choose Vendors

2. Select the vendor you want to verify

3. Clicking the "Edit" button at the top right.

4. This will show the Vendor Information page, verify the "Track payments for 1099" option is checked at the bottom right of the page.


To change this for multiple vendors:

1. Launch the “Prepare 1099s” wizard (from the Vendors tab in Expenses) and proceed through Steps 1 & 2 as normal

2. In step 3 of the wizard, click the "Add from vendor list" button at the top right

3. This will display a list where you can individually select and deselect vendors for 1099s. You can also select or deselect all vendors by clicking the checkbox next to the "Vendor" header at the top of the list.






Accounts are not mapped to 1099 boxes

On step 2 of "Prepare 1099s" make sure all accounts used for 1099-eligible payments have been assigned to a box on the 1099.


Box 7.png


 To find which accounts are used by any missing payments, go to step 4 of "Prepare 1099s". If an amount is not correct, you can click on it to get a report of the individual transactions. You can then check which accounts are used by the vendor's transactions and make sure these are mapped properly to the 1099.


If a vendor is not listed in step 4 of "Prepare 1099s", click the "funnel" icon at the top left of the page (where it says "1099 contractors that meet the threshold") and change "Type of contractors to "1099 contractors below the threshold", and click the "Apply" button. This will usually show the vendors who do not have sufficient payment amounts to require a 1099.


You can click on the amounts to get a report showing the individual transactions. On this report, the "Account" column shows which account is used for each transaction. For amounts that should be included on the 1099, the account needs to be assigned to a 1099 box on step 2.


Note that if you have sub-accounts, each sub-account must be selected - selecting only the parent account will not pick up payments using the sub-accounts.






Payment is excluded from the 1099

On step 4 of "Prepare 1099s", if an amount is shown in the "Excluded" column, this amount has been intentionally excluded from the 1099 because it is a credit card or other electronic payment.


For these payments, the payment processing company will report the payment on a 1099-K, and you should not report this amount on the 1099-MISC forms that you create.

QuickBooks determines which payments to treat this way by looking for certain codes in the "Check no" field of a check or the "Ref no" field of an expense.


A transaction will be excluded if one of the following codes is used: debit, debitcar, dbt, dbt card, dcard, debit cd, visa, masterc, mc, mcard, chase, discover, diners, paypal.






Journal Entry is excluded from the 1099

If a vendor payment is entered as a Journal Entry, the vendor name should be included only on the line of the Journal Entry that contains the expense account, or any other account that represents the reportable payment to the vendor.


If both the debit and credit line include the vendor name, then both amounts will be picked up by the 1099 calculations and will zero each other out.


Once you find a Journal Entry that should be included on the 1099, the account used by the amount that should be reported must be mapped to a 1099 box.


See "Journal Entry Report" below for info on how to find Journal Entries.






Journal Entry is incorrectly included on the 1099

If you create a Journal Entry and include a vendor's name, and the account on the line with the vendor's name is mapped to a 1099 box (on step 2 of "Prepare 1099s"), then that amount will get included on the 1099 for that vendor.


When you include a vendor's name and map an account to the 1099, QuickBooks assumes that this is a reportable payment.


If the Journal Entry does not actually represent a 1099-eligible payment, then the 1099 amount for the vendor will be incorrect.


To remove the amount from 1099 calculations, either:

· Remove the vendor's name from the Journal Entry OR

· Make sure the account with the vendor's name is not mapped to a 1099 box in "Prepare 1099s".


See "Journal Entry Report" below for info on how to find Journal Entries.






Journal Entry Report

To find Journal Entries for a vendor:

1. Go to Reports, enter "General Ledger" in the search box, and select the General Ledger report

2. Scroll to the top of the report and click the "Customize" button

3. For Report Period, select "Last Year"

4. Under Rows/Columns, click "Change Columns" and unselect "Name" and select "Vendor"

5. Click the "Run Report" button

6. Use your browser's Search or Find function to search the page for the vendor's name and look for a line with "Journal Entry" in the 2nd column

7. Click on one of the values in this line to open up the Journal Entry

Best answer January 31, 2018

Best Answers
Level 6

Common Causes for Incorrect Amounts on 1099s


This is a very useful article. Written and posted at a very good time too. 

View solution in original post

6 Comments 6
Level 2

Common Causes for Incorrect Amounts on 1099s

Thanks a lot for such great tutorial) 

Level 6

Common Causes for Incorrect Amounts on 1099s


This is a very useful article. Written and posted at a very good time too. 

Level 1

Common Causes for Incorrect Amounts on 1099s

Hello Lisa!  I searched for a solution to my flavor of this issue but couldn't find one.  I have several 1099s that I make payments to in one ACH, weekly.  The payments all go to the same account, but different "names", obviously.  The goal is to have these payments show up on the 1099 and currently they are not.  I am making a journal entry so that I can match the amount to the amount the bank will have on the statement. 




Thanks for your help! 

Michael K

Common Causes for Incorrect Amounts on 1099s

Thanks for reaching out, @DukDukGoos. Happy to help out.


You can map accounts to your 1099 in QuickBooks Online. To categorize 1099 payments to coordinate with the boxes, please follow these steps:


  1. Go to Workers and choose Contractors.
  2. Hit Prepare 1099s.
  3. Click on Let's get started.
  4. Review the information in the Company section, then Next.
  5. In the Account section, this is where you will have to categorize accounts. On the categories page, select the checkbox next to all the 1099 boxes that fit the type of the contractor payments you make. Review the payment totals for each box. If you don’t see all of the payments you expect, check that the list shows right tax year and type of vendor (they should meet the 1099 threshold). Excluded payments are typically those paid by credit card, which are reported to the IRS by the credit card issuer. Once you're done, click on Next.
  6. In the Contractors section, review the contractors' information, then Next
  7. Select Finish preparing 1099s.
  8. Click on Go to 1099 E-File Service to e-file your 1099s.


To learn more about the boxes on the form 1099, you can check out this helpful article: Form 1099-MISC.


Shoot me a reply if you have any other questions. I'm here to help. Have a wonderful day!

Level 1

Common Causes for Incorrect Amounts on 1099s

I have several issues I don't see Quickbooks addressing anywhere.


1) I need to fix this issue going forward, perhaps by creating more accounts; but some 1099-eligible payments and some non-eligible payments are paid from the same account. Is there a way to fix this so that (a) the year's bookkeeping doesn't get messed up (as everything's already reconciled) and (b) so that the 1099 report only pulls the eligible payments from those accounts?


2) I have a few vendors whose amounts are all from the same account, and yet the amount in the 1099 report doesn't match the total transactions for that vendor. In many cases, it's an odd number off, like $50 when we've never made a payment of $50 - sometimes we've always paid the same amount every month for 12 months, and the 1099 report amount is off by $50 or $100. What is the report excluding, and how?


3) I have a couple vendors whose 1099 shows more money than we paid them in the whole year. Where is the additional amount coming from?


Thank you.


QuickBooks Team

Common Causes for Incorrect Amounts on 1099s

Thank you for visiting us here in the Community, @Elaine_in_Detroit. I can share insight about the issue you’re encountering with 1099 in QuickBooks Online.

You will need to amend your chart of accounts to verify that separate accounts are accessible for each form to utilize if you paid 1099-MISC and 1099-NEC contractors and posted to the same account at the same time.

Afterwards, create a journal entry to move the amounts to show in the said form and modify payments to the new accounts.


To add a new account, here’s how:


  1. Navigate to the Gear icon, and choose Chart of Accounts.
  2. Select New, enter Account TypeDetail Type and any other info needed.
  3. Enter the date and Account balance.
  4. Select Save and Close.


Here's how to move payment to the new account:


  1. On the left pane, click New +.
  2. Select Journal Entry and fill out the fields.
  3. Click Save and Close.


I’ll add this link for your additional information on how to modify your chart of accounts for your 1099-MISC and 1099-NEC filings in QuickBooks Online.


The 1099-MISC and 1099-NEC calculations do not include payments made to 1099 vendors through credit cards, debit cards, or third-party systems like PayPal, which are excluded from the computations. Refer to this article for your guidance.


Additionally, I added an article for your reference about form 1099s.



Please know that you're always welcome to swing by anytime if you have more questions. We're always here to help.


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