I am filing 1099s through QBs. In 2018 we switched to 'Pay Bills Online' for all vendor payments. I came across the article below. It seems that ACH and check payments made through the 'Pay Bills Online' aka bill.com service might be considered 'Excluded Payments', per article below. I would prefer to report these payments on 1099s. Should payments made to vendors via 'Pay Bills Online' (bill.com) be excluded from 1099s?
See excerpt from QBs article below:
Are credit card payments excluded from the 1099?
If you made any payments to contractors by credit card, debit card, gift card, or a third-party network like PayPal, you must exclude those amounts from your 1099-MISC forms.
Check the excluded column for any payments made electronically or by credit card. These payments will be reported by your bank or payment provider and not included on the 1099. You can select the amount to open the Excluded Payments by Vendor report and see payment details.
Instead, the IRS requires payment settlement companies to report those amounts. For more information about contractor or vendor payments you should not report, review the IRS instructions for Form 1099-K. Small businesses don't file form 1099-K. It is for payment settlement companies, such as banks, to file.
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Credit card and debit card payments should be excluded from 1099s. On-line banking transactions generally generate a physical check to the vendor. I have 100 customers that pay by on-line banking and I receive a bank check.
Transactions processed via a credit card are excluded. The credit card merchant will send a 1099 for all credit and debit card transactions.
I can definitely see how online payments made from my own bank would be the same as check payments. The confusion I have is: Is the service that bill.com provides more like paypal OR more like a bank?? They are a 3rd party that withdraws from my bank account and makes payment from their account (either by check or direct deposit).
Thanks for getting back, TimQ.
Allow me clear up your confusion about how Bill.com service works.
Bill.com is a third party application that helps you with bill payment process. It has a feature for electronic payments where payments automatically sync with QuickBooks.
The following article provides more information about the features that Bill.com offers:
Fill me in if there's anything else you need help with or questions about this. I'm always here to answer them for you.