Setting Up 1099 Accounts

IRS changes starting with the 2011 tax year

For the 2011 tax year, some forms of payments from 1099-MISC will be reported on a new third-party form 1099-K. Find out what changes you need to make.

To select an account:

  1. Choose QuickBooks > Preferences and click 1099s.
  2. Click “1099-MISC forms are filed.”
  3. In the list of 1099 categories, find the categories for which you report amounts to the IRS (many businesses report amounts only for “Box 7: Nonemployee compensation”). For each category, in the Account column, select the account you have been using to track that type of 1099 payment to your vendors. (If you have been using more than one account, click Selected and then click, individually, the name of each account.)

    Important: Each 1099 category must have its own unique account. For example, if you report non-employee compensation (Box 7), and you have an expense account named “Payments to Subcontractors,” you can select “Payments to Subcontractors” as the account for tracking non-employee compensation. Having selected “Payments to Subcontractors” for Box 7, you cannot use it to track any of the other 1099 categories.

    You can use the following types of accounts to track 1099 categories: expense, other expense, other current asset, fixed asset, other asset, other current liability, and long term liability.

  4. (Optional) In the Threshold column, change the threshold amount for a category. When to change the threshold amounts
  5. Repeat steps 3 and 4 for any other 1099 categories for which you need to select accounts.

Asset

Your company assets are the things that your company owns.

QuickBooks distinguishes between two types of assets: