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B
bjk
December 1, 2020
Question

1099-NEC

  • December 1, 2020
  • 3 replies
  • 4 views

I see the article on making/moving accounts for the 1099-NEC form. I don't get it.  What am I supposed to be moving? My vendors that need 1099's are put under contractor/outside labor, landscaping, equipment repair, etc.  on my Chart of Accounts. Do I now put them under an account called 1099-NEC? If that is the case then I will have several categories just lumped into one. Thank you for any input.

    3 replies

    S
    SarahannC
    Level 9
    December 1, 2020

    Hello there, bjk.

     

    Yes, you'll need to move them to the newly created 1099-NEC account in your company file. For the tax year 2020, the IRS separate the non-employee compensation into a new form, and we'll have to track the transactions separately by creating a new account for the 1099-NEC too. 

     

    There are two ways to move the payments to the new 1099-NEC account. You can either create a journal entry or by opening the existing contractor payments. Here's how:

     

    1. Go to the Vendors menu and select Vendor Center.
    2. Locate the name of the vendor and double-click the transaction.
    3. Edit the account and any information that needs to be corrected.
    4. Then, Save and Close.

     

    For additional detail, please check this article. Once done, you can then prepare and file your federal 1099s with QuickBooks Desktop (QBDT).

     

    Let me know if you have other questions or clarification. Take care always and stay safe.

    B
    bjkAuthor
    December 1, 2020

    Thank you SarahannC.

    So instead of my payments being broken out (currently) they are all going to be lumped under a 1099-NEC? This doesn't help in figuring Cashflow breakdown or the break out on the P&L. 

    Is this new set-up just so I can have QB generate/file the 1099-NEC for me?

    If so, couldn't I just skip this new set-up and file the forms manually? I hate messing up my chart of accounts. 

    L
    lin_jcaj
    Level 9
    December 2, 2020

    I appreciate you for getting back to us and providing additional details, bjk.

     

    You'll want to verify your vendors if they'll be reported in 1099 NEC or 1099 MISC to know who's expenses will be allocated to. Once verified, that's the time you'll have to create a Journal Entry for the new Expense account for mapping 1099 NEC. 

     

    Since the mapping of the 1099 NEC and 1099 MISC needs to be of separate accounts so they won't mix up when generating the tax forms. For more information about 1099 forms in QBDT and when to file them, please check out learn what 1099 forms there are and how you can prepare for the 2020 tax season.

     

    I've also added the tax year 2020 instructions for form 1099-MISC and 1099 NEC that will guide you when filing your 1099 forms in the IRS.

     

    Please let me know if you have further questions about the 1099 forms in QBDT. I'll be sure to help.

    C
    cavallettoranches
    January 28, 2021

    I have one account that I use for 1099 vendors, do I still need to create a new GL #? I can't seem to get my vendors to map to NEC? Please offer any advice.

    M
    MirriamMQuickBooks Team
    QuickBooks Team
    January 28, 2021

    Hi there, cavallettoranches.

     

    If the account was used for Box 7, then you'll have to create a new GL account. 

     

    To create a new account:

    1. Go to the Lists menu at the top.
    2. Select Chart of Accounts.
    3. Click the Account dropdown, then choose New to create a new account.
    4. Select an account type of Expense, Other Expense, or COGS.
    5. Click Continue.
    6. Enter the Account Name and details such as Description, Note, and Tax-line Mapping.
    7. Select Save & Close.

    Once done, record a Journal entry for the expense to transfer with the vendor's name so you can use this to map in 1099 NEC Box 1.

     

    Please check out this page for more information: How to modify your chart of accounts for your 1099-MISC and 1099-NEC filing.

     

    Additionally, to know what can be excluded, see What payments are excluded from a 1099-NEC and 1099-MISC?. You can also check out the 1099 E-File: QuickBooks Desktop setup, troubleshooting, & FAQs article for your reference. 

     

    Leave a comment below if you have other concerns regarding the process. The Community and I will be here to help you. Have a great day.

    C
    cmatt74
    January 29, 2021

    Finally figured it out, still not a fan of the NEC and MISC split

    M
    MASP1
    January 30, 2021

    If you are in California, if your 1099-NEC has only 3 copies instead of the usual 4 with the 1099-MISC you are responsible for sending a copy of the 1096 and 1099's to the Franchise Tax Board by February 1.  

     

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