When tax time looms large, it’s easy to freak out—suddenly you remember that on top of all the other tasks you must complete, you need to print and send out 1099-MISC forms for all your contract service vendors. Form 1099s need to go in to the IRS, on paper and organized with a form 1096 if you have less than 250 of them to send. If you’ve got 250 or more form 1099s to send, you’ll need to submit them electronically to the IRS, though you’ll still need to print and send them to each of your vendors. This article tells you how.
Changes in 1099s for tax year 2011
If you have 1099 vendors, the IRS has made some changes that may affect you. Starting with the tax year 2011, you don’t have to report certain types of payments to 1099 vendors. Payment service companies will report these payments instead. Don’t panic! We’re here to help.
So what’s changed for 1099s this year? Here’s the scoop in a nutshell.
Starting with tax year 2011, you will not report payments you made to vendors using these methods:
- Credit cards
- Debit cards
- PayPal (and similar payment services)
You will continue to report payments you made to your 1099 vendors using these methods:
- Direct deposits
- Electronic funds transfers
See? Not so bad. The best part–payment networks like Visa, MasterCard, other credit cards, and PayPal will be sending your 1099 vendors a 1099-K form that shows the total money received through their network. So if you always paid your 1099 vendors with PayPal (or any of the methods in the list) you don’t have to send them 1099-MISCs this year. That means less tax work for you, and that’s always a good thing!
Use the updated 1099 Wizard you’ll find in the latest product update to get your 1099s done slick, quick, and correct.
QuickBooks 2011 or earlier
Update 1/31/2012: If you’re using QuickBooks 2010 or 2011 and looking for the app you received email about several weeks ago, that app is no longer available. Use the manual solution to check and process your 1099s.
1096 Printing Change
Starting with tax year 2011, the IRS has changed the layout of the 1096 form—that’s the form you submit to the IRS that matches up with the 1099-MISC forms you send to your vendors.
If you’re running QuickBooks 2012, 2011, or 2010 and you haven’t submitted your 1096 yet, we’ve got you covered. All you need to do is go to QuickBooks > Check for QuickBooks Updates to get the latest product update. Go through the process of creating and printing your 1099-MISC and 1096 forms. When it comes time print your 1096 form, all will be well.
If you use QuickBooks 2009 or earlier, you’ll need to fill out your 1096 form by hand this year.
Already printed your 1096 form using QuickBooks and filed it with the IRS? You’ll need to reprint and refile it. Sorry about that!
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