1099 Prep Process
- First, review these helpful resources:
- What is an IRS 1099 form? – Intuit
- Who should receive a 1099 form? – Accordus
- Instructions for Forms 1099-MISC and 1099-NEC (01/2022) – IRS. Bookmark this page for any specific questions that arise.
- In each client folder, navigate to the ‘Accounting / 1099s, W2s, and Vendor W9s / 1099s CY 2023’ folder in Dropbox to find the file named “Client Name – 1099 List DRAFT – yyyymmdd.”
- You’ll see the tabs: Transaction Report, Vendor Contact List, 1099 List – DRAFT, and 1099 Tags.
- The Transaction Report tab is the list of expense transactions through yyyymmdd.
- If some vendors have differences in the “Name” and “Vendor” fields, I’ve included both columns in this tab. In your client’s QBO, please make sure that “Vendor” is correct and the field of record.
- Then, enter the appropriate ‘tag’ in the right-most column.
- The tags you should use are in the “1099 Tags” Tab and have instructions there.
- If helpful, use the other column called “Payment Method” to keep notes as you research the history of the transactions.
- After you’ve tagged each transaction, create a Pivot table with the vendor names in Column A, sub-grouped by Tag, and the total CY2023 amount for each vendor in Column B.
- Next, populate the ‘1099 List – Draft’ tab using VLOOKUP, grabbing information from both the Pivot tab and the Vendor Contact List tab. The cell you base your VLOOKUP on should be the Vendor Name. You may need to manually populate some columns.
- Reach out to Hannah/TL to resolve open questions on your TBD Tags.
**Watch this video for how to run this process: https://vimeo.com/891466943/d75ad1067c?share=copy
Throughout the Year:
- For reimbursements, code payments to a “Reimbursement” account. Always add “Reimbursement” to the memo of the transaction.
- Complete 1099 Prep process regularly. These are run on cash-basis, so you could refer to previous month’s 1099 Prep files to make this go faster.
- Request W9s for any new vendors paid by check, cash, or ACH.
- In QBO Vendor account, select “Track for 1099” for the vendors who qualify for this calendar year
- Be sure to indicate the payment method on all transactions.
- Be sure all expenses are tied to a vendor (as applicable)
December
- Complete 1099 Prep process
- Determine (with TL and/or Hannah) if Accordus will file 1099s via Track1099 or the client’s payroll company (QB, Gusto, Thread, etc.)
January
- By the 15th of the month, complete one last 1099 Prep process and provide the final 1099 list to Hannah/the TL, highlighting what information is still missing or needs to be reconciled.
- Be sure to check for any payments made toward assets or prepaids that would be eligible for 1099s (paid via check/cash/ACH, for an eligible expense, and to a vendor with an eligible tax ID) but would not be expensed in the current year.
- Communicate clearly to the TL/Client – “let us know if you see any changes by the 19th of the month.”
- By the 20th of January, file the 1099s
- By the 24th, view all filed 1099s and confirm if they were delivered successfully. Resolve any not delivered.
- By the 25th, provide the client with a PDF of filed 1099s and save to Accordus Dropbox.
- By the 27th Ask client to confirm again that all vendors and amounts look accurate.