Excludable Payments from 1099

Hello there, @SAustin. I'm here to provide some information about those payments that are excluded from the 1099. 

The site that you've previously seen might have been updated. You may check this article instead: Understand which payments are excluded from a 1099-NEC and 1099-MISC. This includes the list of payments that are excluded from the 1099 form.

Then, you can also run the 1099 Summary report to verify excluded payments. To get started, please go to the Where can I find the payment information? section and select QuickBooks Desktop.

Once everything is fine, here's an awesome resource that you can open to have a guide in preparing and filing 1099s in QuickBooks Desktop: Create and file 1099s with QuickBooks Desktop. 

Keep me posted if you have any additional questions about the 1099 forms. I'm always here ready to lend a hand. Have a great day ahead. 

I know all of that.  If you'd read my initial question, that is NOT what I'm asking.  

I reviewed your initial questions from this post, @SAustin. I'd like to share some thoughts about excluding payments from 1099.

The option to use a list of terms to hide payments from the 1099 Detail report is currently unavailable in QuickBooks Desktop.

Most excluded payments are identified by account type, such as credit card payments. Some can be identified by key terms such as "Debit," "Debitcard," "DBT," "DBT card," "DCard," "Debit CD," "Visa," "Mastercard," "MC," "MCard," "Chase," "Discover," "Diners," and "PayPal."

Any payment made using a credit card, debit card, or third-party platform like PayPal, Venmo, etc is excluded from 1099. These transactions can be excluded by using the above keyword suggestions. By putting these codes or terms, it's simply telling QuickBooks that this isn't a check or a direct money transfer that's being paid with a card or some sort. In this case, QuickBooks is going to exclude them.

Additionally, I suggest making sure that the account type for the transaction you want to hide is correctly mapped as Omit these payments from 1099. You can do that by simply going to Preferences. Here's how:

1. Open the Edit menu.
2. Click on Preferences and go to Tax: 1099.
3. Go to the Company Preferences tab.
4. Click on the Yes radio button.
5. Select Click here under If you want to map your accounts to boxes on Form 1099-MISC.
6. Choose Show all accounts from the drop-down.
7. Omit all payments you want to exclude from the form.
8. Lastly, click on Save and close.

That should do it! I'll also attach these handy articles about handling 1099 in QuickBooks.

• Create and file 1099s with QuickBooks Desktop
• Understand which payments are excluded from a 1099-NEC and 1099-MISC

Keep in touch so we can help you further about this matter or QuickBooks in particular. Have a good one!
 

Thank you.  I just tested some other payment types and unfortunately, they did show up on the 1099 Detail report - SQUARE and VENMO.

As you said, PAYPAL works, but abbreviating it as PP does not.  Abbreviating credit card as CC, did not exclude the payment from the 1099 Detail report either, but labeling it as VISA did.

@Mich_S   RE: The option to use a list of terms to hide payments from the 1099 Detail report is currently unavailable in QuickBooks Desktop.

What happened to the option? Why would Intuit take it away and make it unavailable?

@SAustin 

From my past testing and a foggy memory of the details when a help system actually existed in QB, if you create a bank account called "PayPal" to record your PayPal activity, which is the best way in QB since PayPal functions like a bank account, it will be ignored. Same is true for all transactions in a Credit Card type account, regardless of the transaction document number.

Yes, at the time Intuit came up with this list of things to ignore Square and Venmo didn't exist, and since Intuit hasn't updated the list in many years they're not ignored.

Note that one way to minimize the pain of creating 1099's, or to eliminate it, is to avoid paying 1099 vendors with cash. If you consistently use one of the payment methods that is reported on the back end, then you won't have to file any 1099's - or very few, for select vendors that won't accept credit cards or PayPal/Venmo type payments.

if I am using venmo I will label it as paypal.

Should that be in payment method or ref#?

Hi there, hopebj. 

Thank you for reaching out to the Community. When entering a payment method using a check in QuickBooks Desktop, it's important to keep in mind that check payments do not come with a payment number. Instead of a check number, I recommend utilizing the Doc Number field and labeling "PayPal" in the column field. This way, you can quickly locate payments within your financial records. Taking this step can help streamline your payment process and ensure accurate documentation and up-to-date.

I'd recommend checking out this article to learn more about 1099 boxes and how the system populates them: Understanding payment categories for the 1099-MISC and 1099-NEC.

Also, you may want to check out this article as your reference to answer the most commonly asked questions about 1099 forms and how you can prepare for the tax season in QBDT: Get answers to your 1099 questions.

Don't hesitate to get back here and reply to me if you have follow-up questions. You can also post new questions if you need anything else in the future.

Checks don't have a payment method. Use the Doc Number field and include one of the key words instead of a check number.

@AileneA  re: In QuickBooks Desktop, when paying a 1099, you typically enter the payment method in the "Payment Method" field. 

"When paying a 1099"? That doesn't make any sense. 1099's are filed, not paid.

What are the keywords to enter in the doc number field on a check so they're excluded from the 1099 Misc?  I think VISA is one, and perhaps EFT?  PayPal?

Thank you but that did not answer my question as to where to put the information

RE: "that did not answer my question as to where to put the information"

How is that?  Since checks have no payment method, as I noted, it seems that is an answer to your question?

Also, "Use the Doc Number field and include one of the key words instead of a check number."  seems specific.

The payment type, ex: CC, Paypal, Debit- goes in the field where you would normally have a Check number. Quickbooks is "supposed to" recognize which type of payments will show up on the 1099 Detail report that go on a 1099.

Years ago, there was a list of how to phrase the payment type, so as not to be included on the 1099.  

I believe the complete list is:

Debit

Debitcar

DBT

DBT Card

DCard

Debit Cd

Visa

Masterc

MC

MCard

Chase

Discover

Diners

PayPal

BigRed, do you have a QB support link referencing this list?  I'm trying to locate original/modified/updated instructions offered by QB support.  Thank you.

I don't have a link.

Thank you for your reply.  Would you happen to remember where you got that information?  I cannot seem to locate it anywhere in help articles.  Thanks again.

I don't remember where I got it.

Thanks again BigRed!