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• Remember to download the latest payroll and QuickBooks software updates before running your 1099s, in case the federal government issued an updated 1099 late in the year. For instructions on how to get and install QuickBooks software updates, see the QuickBooks Product Updates page on quickbooks.com at www.quickbooks.com/support/updates.html. For instructions on how to get payroll updates, see the article How Do I Update My Payroll Tax Tables?
• Make sure you set up QuickBooks to run 1099s. Incorrect setup is the top cause of problems when running 1099s at the end of the year. Review the Setting Up QuickBooks to Run 1099s instructions.
• Form 1096 is available in QuickBooks 2005 and 2004. If you have QuickBooks 2003 or 2002, you must complete this form manually, using the 1096 Summary Information provided in the Select 1099s to Print window.
• You must print your 1099s and 1096 on preprinted forms. The government does not allow QuickBooks to print these forms onto blank paper. Remember to plan ahead and order your 1099s early. You can purchase preprinted 1099 and 1096 forms from many vendors, including Intuit. To order them from Intuit, see the Tax Forms page of the IntuitMarket Web site.

• If the Print 1099s/1096 option (or Print 1099s option in QuickBooks 2003 and 2002) does not appear in your Vendors menu, you haven't turned on the 1099 preference. If you haven't turned on the 1099 preference, you probably haven't completed the other steps needed to run 1099s in QuickBooks. See Setting Up QuickBooks to Run 1099s, below.
• If a particular independent contractor doesn't appear in the vendor list on the Select 1099s to Print window, you probably didn't set them up as a 1099 vendor. Follow step 3 in Setting Up QuickBooks to Run 1099s, below.

• The 1099 accounts were not set up correctly. Follow step 2 in the Setting Up QuickBooks to Run 1099s instructions.
• The 1099 category had only one account assigned to it when it actually needed multiple accounts. See step 2a in the Setting Up QuickBooks to Run 1099s instructions.
  
  

1. From the Reports menu, choose Vendors & Payables, and then choose 1099 Summary.
2. If necessary, change the date range in the Dates field.
3. Examine the report for missing 1099 vendors, and then select All Vendors from the left 1099 Options drop-down list. Any 1099 vendor not appearing on the report needs to be set up correctly. Follow step 3 in Setting Up QuickBooks to Run 1099s, below.
4. If all missing 1099 vendors uncovered in the previous step have been set up, yet some 1099 vendors are still missing, select Only 1099 vendors from the left 1099 Options drop-down list and All allowed accounts from the middle drop-down list.
5. Double-click any amount in the Uncategorized column of the report to open the 1099 Detail report.
6. Check to see if any accounts need to be set up as 1099 accounts by examining the Account column of the 1099 Detail report. Follow step 2 in Setting Up QuickBooks to Run 1099s, below, to set up any accounts. (If you happen to notice any transactions that should have been assigned to a different account, double-click the account to edit it.)
7. When you are finished with the previous step, close the 1099 Detail report to return to the 1099 Summary report.
8. Select Only 1099 accounts from the middle 1099 Options drop-down list. You should now see all expected 1099 vendors to whom you have paid amounts that total or exceed the threshold for the 1099 category.
9. If a vendor is still missing, select Ignore thresholds from the right 1099 Options drop-down list. The vendor may not have met the threshold for the year.

1. Turn on the 1099 preference
   1. From the Edit menu, choose Preferences.
   2. Choose the Tax: 1099 icon in the left column of the Preferences window.
   3. Click the Company Preferences tab.
   4. Select Yes after the question Do you file 1099-MISC forms?
2. Assign the correct accounts and set threshold values
   1. In the 1099 Preferences window, select the appropriate account or accounts for each 1099 category. If you don't, QuickBooks cannot fill in the amounts correctly on your 1099 forms.
      Note the following:
      • You can assign multiple accounts to a 1099 category by selecting Selected accounts in the Accounts column, and then selecting the appropriate accounts in the Select Account window.
      • An account can belong to only one 1099 category. Therefore, the accounts you select should be the same accounts you use to track payments related to your 1099 vendors. For example, if you set up an expense account named "Payments to subcontractors" and you select it to track the 1099 category "Box 7: Nonemployee Compensation," you cannot use this account for any other 1099 category. Typically, accounts associated with the 1099 are expense accounts, but you can also associate other account types with a 1099 category.
   2. Set the threshold value for each 1099 category. Threshold values represent the minimum you must report to the IRS and to the payee for each 1099 category. If you pay an independent contractor less than the threshold, you don't need to file a 1099 form for that person.
      Note: The default thresholds QuickBooks displays are correct as of the date your copy of QuickBooks was manufactured. But the thresholds might change from one year to the next. QuickBooks does not automatically update these thresholds. You must keep track of them yourself and adjust them if necessary. To obtain the latest threshold information, visit the IRS Web site at www.irs.gov and request a copy of Instructions for Forms 1099, 1098, 5498, and W-2G.
3. Set up your independent contractors as 1099 vendors
   1. Set up each independent contractor as a vendor.
   2. On the Additional Info tab on the vendor's record, select Vendor eligible for 1099 and enter the vendor's tax ID number.