In this presentation, Linda Artesani of Artesani Bookkeeping walks attorneys and bookkeeping professionals through practical strategies to simplify the upcoming 1099 filing season. She begins by clarifying the key differences between the 1099‑NEC (used for contractor payments, including attorney fees) and the 1099‑MISC (used for miscellaneous payments such as attorney‑on‑attorney fees, royalties, rent, etc.), and highlights the specific boxes on each form. She then demonstrates how to set up QuickBooks to capture required information efficiently: creating custom vendor categories for W‑9 and 1099 status, using dropdown fields to enforce data consistency, attaching scanned W‑9 documents directly to vendor cards, and ensuring the vendor’s ID is entered for automatic 1099 population. For QuickBooks Online users without the Advanced plan, she explains how to use tags and tag groups to simulate reporting capabilities, including creating tag groups for 1099‑NEC, 1099‑MISC, and sub‑tags for W‑9 received or pending. Throughout, she stresses the importance of collecting W‑9s before payment, storing them centrally, and integrating these steps into a year‑round workflow so that the next 1099 season is less frantic. The talk concludes with a call to adopt these processes now to avoid last‑minute scrambling and to leverage QuickBooks Payroll’s free 1099 filing feature.
Chapters
Hi there, Linda Artesani, Artesani Bookkeeping. I'm here today to talk about 1099s. Oh, you don't want to talk about 1099s? I hear you. We just got by the deadline for the 1099-NEC forms, but we still have a month or a little partial month to go before the 1099-MISC forms are due. So I break down a little bit in the article what the difference is in the forms and the different boxes that are in the miscellaneous form. So 1099-NEC is for the contractors that you hire, outside contractors, maybe witness fees if you're working with attorneys. There's multiple ways that you might need to send an NEC form. Miscellaneous form can also be for attorneys, but it could be like I am— my law firm had to hire a law firm to represent themselves. Maybe they were being sued. That would fall into the attorney box if you had to do that. Also, there's royalties and there's a few other boxes in there, rent. that you might need to fill out a 1099-MISC form for. Now, so much stuff to remember when it comes to 1099s. What do you think you might need to do to, going forward, strategize to make this season a little bit more pleasant? I know, 1099 season pleasant, that's a hard one to imagine. Let me share my screen. I'm going to show you what I'm using and how I'm doing this in my— with my clients to help set us up for success. Next year. So my stopping point is custom fields. Custom fields is a great place to track some of these things. I've created 2 new vendor categories, one for W-9, one for 1099. They are both dropdown boxes. Why did I do dropdown? Because I want to make sure that the data stays pristine. I don't want people typing in various entries. I want them to be able to select. It's the— probably the most powerful of the types of features that you can pull off of a custom field. Let me just grab my W-9 one. Actually, I'll grab the 1099 one so you can see how I set this up and how I worded it. So I've got a 1099 master category, and then what I did was I made an NEC and a miscellaneous so that we can delineate during the year which one goes where. I made sure that they hit all the buckets that might be where— how I would pay the vendor for— that's a 1099 vendor. So we have Expense, Check, Bill, Vendor Credit, all of those there. And this is going to show up on my vendor forms now. So I'm going to hit Save here. I also created one for a W-9. I want that box— yes, that's inside the vendor card, but I want that also to be seen on the bill form. So a lot of times, because I work with mid-market clients, I work with clients that I might work with the admin staff, and during the year they forget to ask for the W-9. The rule is you want to ask for it before you actually pay the vendor, so that way they're really invested in getting you that paperwork that you need. So it's best to get it before you pay them. But if you haven't— if you've paid them and you didn't think about it, having it on the form— and I'll show you in, in this case here, if I go over to the new box here on the left and click a bill. And I can actually— I've got one pulled up. I'll pull up a bill right now. You can see on this bill, I've actually hired this company, Endicia, and they did some, you know, tech work. They went in and did a whole bunch of custom technology work inside of our firm. So we have a big law firm. They came in, they wired up all these things, and this is the labor portion of it. So we hired them as a subcontractor to do this work. They've now billed us. This is separate of them, you know, the whole job that they've done. And now I want to show that I did ask they were 1099-NEC. So here's a little dropdown that shows what they can choose from, and that I've received the W-9. Now the best place to receive the W-9 and to keep it stored is to actually come into their vendor card. You can upload attachments right here and just pull it up here. So once you get it, scan it, take a picture of it, pull it up here. Now you've got it in and it's attached to your vendor, and then you don't have to worry about looking for that file or folder like we had to do it a long time ago to keep track of records. You can also, as we come through here, you'll see here's where it says W-9. I have received it, I'm still waiting. And then you can use this W-9 for the NEC. I can hit Save and all those features are there. That's also a place that you can put in— don't forget to do this when you get their 1099 in, the W-9 in rather— you're going to click this box and put their ID in. That's really important because that's how it's going to populate if you do your 1099s through QuickBooks. Which, by the way, if you have QuickBooks Payroll, it's a feature that's included. So it doesn't cost you anything to process 1099s. Isn't that amazing? So how do you track 1099s if you don't have QuickBooks Online Advanced and you want to use Plus or Essentials? You have tags. So it's not as robust in the reporting. You only have 2 reports that you can really pull from tagging, but you could get creative, create a couple of tag groups called 1099-NEC, 1099-NEC Miscellaneous or Misc, and then make those the tag groups because that's the only way you can run a report when you use tagging. And then under that, you can make a subgroup, a tag underneath the group, and call it maybe W-9 Received, W-9 Waiting, or something like that so you can be able to run a report in that manner. So I hope that helps. It's just kind of a strategizing way to get ahead of the game for next year and maybe be in a better place. We were really scrambling this year trying to get all the new clients on board that we've onboarded in the past year, trying to get them up to speed. And we've now added that to our workflow. So hopefully you can learn from some of the things that we've done. We wanted to make this much smoother process next year so that we're not really trying and up against the last day of the month trying to process 1099-NECs. You still have to the end of February to do the MIS forms. So the miscellaneous are not due until February 28th this year.
