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i thought it would be fun to create a new updated 1099 training for you because there are some changes so let's get in i'm gonna share with you what to expect if you don't know there's been some updates and changes to the form so there's not only the 1099 there's now the 1099 nec so let's talk about how to prepare for your year end with some updates that you're going to need to know so let's go through some just basics about changes and then we'll jump straight into quickbooks so the first thing to know is as of the 2020 tax year there is a new form that replaces the old 1099 miscellaneous as far as only box seven is concerned in other words the amount that was formerly box seven on the 1099 miscellaneous as of 2019 and prior is now box one on the 1099 nec there's some other changes as well which you can find out more about later one thing to know is that the 1099 nec is specifically reporting non-employee compensation so subcontractors independent people whereas any other compensation is still on the 1099 miscellaneous i did a whole training on this inside for my confidence quickbook community and my simplified so if you're looking for more training that's a great place to start but i wanted to give you at least some of what you'll need to be able to get those things answered so let me go in and share with you my screen and i will share with you quickbooks desktop and online so that you can see the adjustments in there the first thing to know is when you're setting up your vendors as always which i've talked about before you're going to go to vendor vendor center but we want to always start here i have this is my sample file so here's the candice camp for example i'm gonna go over here to the pencil and you are going to go you're gonna make sure that the vendor name the company name your address is all accurate then you're gonna go under tax settings this is the key you want to make sure that you market as eligible for 1099 if the person is eligible and you are going to make sure they have a tax id number now this is similar to what we've always done for taxes where the big change is going to happen is when we start linking and matching up our vendor so you're going to go under vendors forms print slash e-file this used to talk about the wizard it's no longer says wizard now it says print e-file your 1099 forms it says are you ready to prepare and you hit yes now the first time i click this it asks me to do a backup of my quickbooks so you may need to do that if your form doesn't look like this when you do it you're going to want to make sure you go under the window under the help and make sure you've updated your quickbooks okay then you're going to decide whether you need the nec which is for independent contractors or non-employee compensation or you may still need the 1099 miscellaneous which is where you're like your rental income your royalties all the things that existed before in the form still exist then you're going to click get started i recommend starting with the 1099 nec and then doing the miscellaneous second i recommend setting both forms up and going through the process that i'll show you with mapping and then actually processing the forms later you can e-file or you can mail them in if you have over 250 forms you're going to still need to e-file the cutoff date for 2021 is february 1st for the 1099 nec for the 1099 miscellaneous you have to have it to the recipients by february 1st it's normally january 31st but because it lands on a holiday this year you get an extension to february 1st the 1099 miscellaneous has to be mailed into the irs or electronically filed but if you're mailing it march 1st if you're electronically filing it by march 31st okay for the 1099 nec you need to both mail it in e-file and give it to the recipients by february 1st this year so you can go ahead and click on get started and then you're going to go through and it's going to have all of the vendors that you have selected are eligible that's why we started with that screen first so that was under vendors vendor center everyone who is eligible you know make sure you click on the pencil go to the tax and make sure they're eligible okay that's what we started with then you're gonna it's gonna have all of them here you can clear them all you can check mark just the ones you want you can also select them all as well then you're gonna click continue and you're gonna have all of your information in here if you need to make any changes you can click on any of the boxes double click and you can make adjustments to anything that you need to adjust if you need to address the address anything like that you can i recommend having them give you a w-9 filled out so it's going to have their contact information as well as their mailing address their either tax id number whether that's a social security or an ein they'll give you that and you'll have all of the data you want to keep that in your file once you make sure all of this is accurate you're going to click continue and this is where all the magic happens this is really we've always had mapping here but this is more important than ever to have your things mapped correctly now every category in here you want it to automatically go to box one you can check mark that i do not recommend it what i recommend doing instead is going through every account that you have over here to the left and mapping it to whether it's going to show up on the nec or not remember nec is for non-employee compensation so these accounts to the left if you're wondering like where do these populate from whenever you are entering a bill or writing a check and you're in here writing a check when you select the account that you wanted to go to so let's just say the canvas camp for example that we have as a vendor and say we're going to write a check for a thousand dollars oops let me fix that when you're over here and you're selecting where you want it to write to so maybe you're you have subcontractor as your expense category cost of goods or maybe you have professional fees and these are all the people that you need to give a 1099 to it's up to you depending on how you set up your quickbooks but you're going to want to make sure that anybody who gets the 1099 nec that you know what categories you're using here that's the trick okay the account that you're using whether you're entering it here or in a bill you are going to find it to the left so if you say professional fees oh yep that's one of them that's anything that goes there is considered non-employee compensation maybe you have a professional fee or something like that maybe labor you're gonna say oh yep that's everybody so you're gonna need to know where those go to okay so you're gonna go through maybe it's subcontractor goes there as well okay professional fee subcontractor whatever so you go through each of these you decide on every line item whether or not it is omitted meaning it's not going to show up on the 1099 doesn't qualify or yes that is what i need in box one or if you have federal withholding that you withheld or state withholding you'll need to allocate the mapping to each of those as well so go through and you'll pick each one whether it applies or not now if it's like say rent expense you will not be able to choose miscellaneous box until you go to the miscellaneous 1099. mine is showing up just because i did a training on this before all right so over here is how it's going to sort which accounts are going to show up in your list you can choose all accounts and that's every single account that you have in your whole chart of accounts if you want and you can sort it by type so that you can easily go through and find it or you can sort it by what accounts are going to show on the 1099. other words where anyone who's been paid in this prior screen that you've selected it's going to show up those accounts that were used in those examples okay mine show a lot of different ones just because i do a lot of different training with the different people that are in these examples that i've created here okay once you've mapped every category and whether or not it should be considered going to the nec it's either yes or no basically if it's no it's omit if it's yes it goes to one of these three boxes then you're going to click continue if you need to know more about the threshold you need to know it's a 600 threshold you can you can check that don't worry about the threshold as much you don't need to decide if somebody should get it you just need to decide if this expense category or this category that you used in quickbooks if it qualifies for the nec or not and then you're gonna click continue okay you're gonna have payments that are excluded you're gonna have payments or included and these are excluded you can also look at your details here now something important to know is if you pay through a merchant a third-party service like you use your credit card or paypal because those people when they set their accounts up let them know they give them their tax id number you don't need to provide a 1099 to anybody that is using a third-party merchant provider so if you ever pay through your debit card or credit card they're going to get a special 1099k so if when you're paying these and anybody you paid with credit card is not showing up that's okay those are not something that you need to worry about they have it somewhere else so when you get to the next screen when you click continue and you get here and you see okay yep that's under the dollar amount plus technically ace hardware doesn't qualify um as an independent contractor then you'll go to say candace camper okay she doesn't qualify what are those transactions and you'll go in and you can always look up all the transactions that were processed inside your vendor center for that vendor you can double click on the checks and go oh yeah that was payroll stuff that's not 10.99 double click on transaction that happened oh yeah that's a journal entry that's a reversing entry that doesn't impact that's an adjustment a double click on the next one and you go through oh yeah we paid for a note payable that's not on the 1099 in ec and you'll go through so just because on here it shows excluded you can go back and make sure that it's not mapped to the wrong account or didn't go to the wrong place if after you verify that if everything's accurately mapped and you feel confident that your one person or your 10 or 100 whatever it is is accurate then you're gonna click continue okay so this is just verifying who really gets the nec form the 1099 or not so you have two choices you can either print your 1099 by clicking print make sure you pick the correct calendar year for what you're looking for you'll have who it's for and you can print i do recommend that the first time that you print it you grab a white sheet of paper mark an x stick it in and test it so you can figure out where your form applies it's gonna be just like a laser check after you've printed all five versions that you're gonna be giving the red one is for i can i can show you that in a minute but the red one is for irs then you have two for the vendor or the recipient one is also for the state and then one is for you to receive as well okay so you're gonna print all five versions you just click print and you're gonna print it five times on five different forms and then you're gonna print your 1096 okay the 1096 is the summary you will need a 1096 for each version of your 1099 form so if you have the 1099 nec you're going to have that and it's going to have its own 1096 and if you have 1099 miscellaneous it will have its own 1096. okay so you're going to go through that if you want to e-file you'll click e-file it will connect to the internet it'll click connect to quickbooks which i'll show you you're gonna put in there is a cost it's two dollars and ninety cents per form you're gonna put in how many forms you have so there's two 1099s to a form typically but in this um when you print them on this you're just going to count each individual business that you're providing in 1099 for will be considered a four so how many of those do you have you're going to select that and then you'll move forward with entering it so they know how many that you'll have okay the 1096 you don't have to worry about when you file electronically so that's the process if you are a desktop user so this is your 1099 miscellaneous you can read all about it if you want to know like okay can you give me more details about everything which forms what boxes all of that you can get more details at the irs website if you want to kind of look at what the 1099 form looks like this is what the new 1099 nec looks like this is the box one for the non-employee compensation um and then you would go through make sure that if you there's two to a page if you're printing them make sure that you void any that are you're not using the form or if you need to correct them that you mark this as corrected this is the a copy that goes to irs you have the state copy if you need to provide it to the state for your independent non-employee compensation form then you have the b which is going to go to the recipient you are also going to have the copy 2 which is also going to go recipient that's why i said you're going to print the same thing five times just on different sheets to go to different places and then this is your copy make sure that you take a photocopy of the a as well as your 1096 that you filled out that you signed as well so you'll mark whether it's a nec or a miscellaneous which quickbooks will do when you print it out directly as well so that's what you're going to do for your 1099 nec when you're all done we'll hit save and close and then let's go back in and talk about the 1099 miscellaneous so the 1099 miscellaneous is right here you're going to click get started it will also have your same list of ones that you said are eligible for the 1099. you're going to click continue and if you want to link up now your rent expense any of the things that go into these list of boxes there's 15 if you have anything that categorizes into here whether it's rent if you have crop insurance proceeds if you have you know gross proceeds from an attorney all these different things um if you want to know more about it we did a training on that um which i mentioned before that's something we do more inside comments quickbooks or our quickbooks simplified community so rent expense you click here you go through if they don't if these things don't belong you want to make sure that they all select as omitted anything that was originally in here that you chose for your non-employee conversation for the nec it will also say you cannot change it in here because you did that in another screen but it does show it just like it showed rent expense when we were in the 1099 nec i recommend actually mapping everything and then going back and printing your form so once you feel good about everything you selected you're gonna click continue you'll have view payments or exclude just like before click continue you can print and look at those reports if your 1099 miscellaneous anything you have qualifies it will let you know it's included will be on the left excluded or unmapped will be to the right you'll notice that none of these technically qualifies we didn't have rent in this example but if you do or any of the other boxes they should show up here you're going to go ahead and click continue go through print your forms that you need which i didn't have any or 1096 if you have one as well or e-file okay the same things apply as far as if you're paying rent or any of the categories for with your credit card they won't show up either now something you may want to know is if you go here to vendors 1099 forms if you just want to see like who qualifies and what it is if you go under 10.99 review 1099 vendors if you click here you'll see every vendor you have whether you say they're eligible or not and if they have a tax id number what is their billing information so that's a great report to pull you can also pull the summary and the detail here and if you want to order your forms from intuit you can order your forms directly from intuit if you're not going to do the e-file so that is the update on how to process your 1099 forms i will do an additional video for how to process them if you are using quickbooks online if you're looking for the online version click on the link above and you can find that if there's a separate process so we'll create a video for each thank you for being here let me know below what was your favorite part was this like aha you can now handle your 1099s let me know that as well and if you enjoy my tips and tricks make sure you subscribe to our channel here on youtube and leave us a comment let us know what is your favorite we will be doing workshops starting this month in january so if you're wanting to learn more about quickbooks and you want more support and help feel free to join us on one of our workshops you can go to candacecamper.comworkshop or click on the link here you will see it and i look forward to seeing you inside our next video i hope this helped you and go out there and crush your 1099s hopefully it's not so overwhelming just know you need the 1099 nec for all of your original box 7 that you used to do on your 1099 miscellaneous that's just no longer there have an amazing day and i look forward to seeing you inside our next tip and trick [Music] bye [Music] you