Common Causes for Incorrect Amounts on 1099s

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.

• Total Payments for a Vendor Don’t Meet the Filing Threshold
• Vendor Not Marked as a 1099 Eligible Vendor
• Account(s) Not Mapped to 1099 Boxes
• Payment Excluded from 1099
• Journal Entry Excluded from 1099
• Journal Entry Incorrectly Included on 1099
• Finding Journal Entries for Vendor

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.

 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