How to verify the accuracy of Forms 1099 and 1096
PrintOverview
Companies that work with unincorporated vendors (such as outside consultants or subcontractors) and pay them more than a specific amount per year (known as the IRS threshold) are required to send a 1099-MISC form to those vendors. In addition, companies that provide vendors with 1099 forms, must also file Form 1096 (a summary of all 1099 forms) with the IRS.
- Consult an accountant, tax professional, or contact the Internal Revenue Service for guidance on which vendors must receive Form 1099-MISC and to check for updated tax laws.
- QuickBooks can track all 1099-related payments and print the forms at the end of the year.
- Each time a payment is made to a 1099 vendor, QuickBooks automatically adds the amount to the total to the appropriate vendor's 1099-MISC form.
Assumptions
You have vendors you will need to issue 1099-MISC forms to.
Details
It is critical to verify 1096/1099 forms and amounts before you send copies to subcontractors and the IRS. Any errors on these forms can impact expense and tax liabilities for the company.
To verify the accuracy of 1099 forms:
- Run the QuickBooks 1099 Detail report to identify all vendors and contractors who should receive 1099 forms.
Verify vendors are listed and identify which vendors should receive 1099 forms.
If vendors are not listed, correct their status in the setup.
- Verify that all pertinent transactions are assigned to 1099 accounts. (You can assign multiple accounts to each 1099 tracking box.)
- Verify that the tax identification number and address for each 1099 vendor and contractor is correct.
