What is Miscellaneous 1099 account in QuickBooks

What is Miscellaneous 1099 account in QuickBooks

For the tax year 2020, the IRS has divided nonemployee compensation into a new form called the 1099-NEC. The IRS has updated Form 1099-MISC and rearranged box numbers for disclosing such profits as a result of this. You can opt to print and e-file your 1099-MISC and 1099-NEC with QuickBooks. There are a few steps you can take now to ensure your chart of accounts is correctly mapped with both the 1099-MISC and 1099-NEC forms and reports so you can build them this year.

Create 1099-MISC and 1099-NEC types in QuickBooks.

If you paid 1099-MISC and 1099-NEC contractors to the same account, you’d need to update your chart of accounts to ensure that each form has its account. Then, either make a journal entry or update current payments to appear in the newly created 1099-NEC or 1099-MISC accounts.

Please note that if you’re not sure which payroll service you have, please contact us. This is how you can figure out which payroll service you have.

Step 1: Make a backup of your QuickBooks Desktop file: Make a backup of your QuickBooks Desktop file before you begin modifying it. If you need to make changes to forms from previous years, you’ll need to restore this backup to access the forms and data from before 2020. When you map the new boxes on the new forms, the data from previous years will no longer be correct.

Step 2: Build a 1099 Summary report: Determine the sums paid and the accounts to which they were paid: 

  • Pick Vendors & Payables from the Reports menu.
  • Select between 1099 Description and 1099 Information.

Please note that reports will revert to the previous calendar year, so make sure the date range next to Dates at the top of the report is accurate.

  • To identify the vendors, use the 1099 Overview and the 1099 Information to identify the transactions. Examine the totals below to see what sums might need to be transferred.

Please note that past reports will be updated if you make changes to your accounts or payments and will no longer reflect prior year filings. Before making any changes, you may want to print these reports for your records.

You’ll need to change your Chart of Accounts to ensure accounts are set up expressly for each form if you need to file both the 1099-MISC and 1099-NEC.

Step 3: Create an account: To monitor the separate payments, create a new account in your Chart of Accounts.

  • Select Map of Accounts from the Lists menu.
  • To build a new account, go to the Account dropdown menu and pick New.
  • Pick Cost, Other Expense, or COGS as the account form, then press Proceed.
  • Fill in the Account Name, as well as the Definition, Notice, and Tax-line Mapping fields.
  • Save & Close is the choice to choose.
  • For each new account to be registered on the 1099-NEC or 1099-MISC, repeat the procedure.

Step 4: Move the payments to that new account: You have the option of either creating a journal entry to transfer amounts to the newly created 1099-NEC or 1099-MISC accounts or editing current payments to the new accounts.

  • Select Make General Journal Entries from the Company menu.
  • To make your journal entry, fill in the fields. When you’re done, double-check that your debits and credits are identical.
  • If you need to make more entries, choose Save & Close or Save & New.
  • Rep this procedure for each payment that needs to be moved.

Make improvements to current contractor payments.

  • Vendors, then Vendor Center are the options.
  • Pick the vendor and look for the transactions you want to alter.
  • To make changes, double-click the transaction to open it.
  • Click Save & Close after you’ve made your changes.
  • This procedure should be repeated for each payment that needs to be changed.

Step 5: How to create a 1099 summary: Run a 1099 Overview or 1099 Information report to ensure that the adjustments on the 1099-NEC and 1099-MISC represent the correct amounts on each account.

  • Pick Vendors & Payables from the Reports menu.
  • Select between 1099 Description and 1099 Information.

Please note reports will revert to the previous calendar year, so make sure the date range next to Dates at the top of the report is accurate.

  • You should be able to see the effects of your improvements.
  • After you’ve completed these measures, you’re ready to start filing your 1099-MISC and 1099-NEC forms.

Conclusion

In conclusion, the whole blog is to help you understand the miscellaneous 1099 account in this software. I hope that this blog helped you in some way or the other and was worth your time.

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