How to Prepare, E-Deliver, and E-File Your 1099-MISC forms in 2013
Every business needs to prepare, deliver, and file FORM 1099 MISC for their non-corporation vendors. In the past, the time and costs of preparing, printing, mailing, and filing 1099 has been quite onerous. In my last post, I covered the basics of setting up vendor records in QuickBooks, QuickBooks Online, and Xero. Read that post because the IRS is very picky about how each of the address lines are used on FORM 1099, and each of the software products you may be using differ on how they store name and address data.
Over the past couple years at The Sleeter Group we’ve been using a web-based tool called Track1099 that completely streamlines the process. This web application pulls the relevant data from your accounting software (QuickBooks Desktop, Sage 50, QuickBooks Online, Xero, Bill.com, Intacct, and others) to help you prepare, e-deliver, and e-file Form 1099-MISC.
One very important feature that differentiates this program from other 1099 E-File Services is that Track1099 doesn’t just E-File, it also E-Delivers. That is, in addition to filing the forms with the IRS, this service provides your recipients with a copy of the 1099 form so that you don’t have to mail them yourself.
This is our third year of using Track1099, and each year it reconfirms to us the huge value over any other method we’ve seen. No more paper, not more mailing costs, and all of our vendors can simply log in to a free portal and retrieve their own form.
Before you jump into filing/delivering 1099’s, however, it is important that you collect your vendor information and update your accounting software properly. See our our article on how to set up 1099’s for details.
This year, I did a test to see how much time it would take me to prepare our 1099s using Track1099. We prepared, e-delivered, AND E-FILED our 1099s in 20 minutes.
Let’s look at some of the advantages of this service:
- E-Filing and E-Delivery: Track1099 allows you to go paperless with the whole process of 1099 filings. You use it to prepare, E-file with the IRS, and e-deliver the forms to your vendors.
- Integration: Track1099 offers integration with Intacct, QuickBooks Desktop, QuickBooks Online, Xero, and Bill.com, as well as being able to export to CSV files. Although the Sage 50 (Peachtree) integration is not quite as seamless, it is still a lot less painful than printing on paper. The best integration we’ve found is to use the Intuit Sync Manager for QuickBooks and QuickBooks Online. Sage 50 has an API based integration also. For Xero you will use the integrated Xero connection (available on January 8th). The Intacct integration is very good, check the Intacct marketplace for details.
- Secure: Industry-standard 256 bit SSL encryption protects your sensitive data. Track1099 is totally PCI-compliant with credit cards.
- Customer Support: Support is provided via live chat and e-mail.
- Combined State/Federal Filings: Track1099 participates in the Combined State/Federal filing program. Each state has its own rules, so you’ll want to check those out and see what requirements they have.
- Paper mailing of 1099s for delivery to vendors with missing email addresses. Additional fees apply for paper mailing.
Track1099 is available to business owners (for their own business) or for tax professionals who would like to manage multiple client accounts.
Here is how the program works
The first thing is to go to the track 1099 web site and create a login. Then, set up your company account by importing from either QuickBooks Desktop or QuickBooks Online (via the App Center/Sync Manager), Bill.com, Intacct, Xero, or from a CSV import (discussed later).
Select Import Data on the left panel, and then click on the method of importing.
To import from QuickBooks or QuickBooks Online, click on QuickBooks above, and then click “Connect to QuickBooks” on the screen below. For QuickBooks desktop users, read “How do I set up a company file for sync.”
This will take you to the Intuit Account page where you log in with your Intuit account information. This is part of the Intuit security protocol to authorize a program to access your data.
If you have multiple company files in the Intuit cloud, you need to select the one to work with.
After you complete the import of the vendors and payment totals, review each 1099 on the screen and make corrections as necessary.
A few notes:
- Depending on which import method you do, you may have to modify or add data to all of the screens. So check every screen carefully before submitting your 1099s.
- You can manually add vendors and payment totals too, so if there are problems with specific vendors, it might be fastest to just manually add them.
To review the individual vendors and their forms, click on 1099 Summary.
Click on an individual name to review/edit data for each vendor. You may need to correct data that was imported properly, so be careful at this step.
After reviewing the 1099s, you’re ready to e-deliver and e-file. Go to the E-file 1099s section and decide when to send the 1099s to the vendors, and when to e-file them with the IRS. This is where you’ll enter your credit card information and pay for the service.
That’s all you have to do! From this point you can check the status to see who you’ve sent forms to, who has received the forms, and when the forms are scheduled to be sent to the IRS.
If you would like to print copies, you can click on any one of the recipients and click “Print Form.”
What Your Vendors Receive
Your vendors will receive email notification that their 1099 is ready for viewing, printing, etc., via a secure login to the track 1099 site:
The link takes them to a page where they can retrieve their 1099.
Here’s a sample of what they would see once they connect:
Note that your accounting software will be handling all of the issues of the new 2011 IRS rules on excluding payments made with credit cards (etc.), this service will take the final amount that your accounting software calculates.
Transferring Data to Track1099 Using CSV Export/Import
To transfer accounting data from systems that do not directly integrate with Track 1099, use the CSV export/import process as described here:
- Export the 1099 vendor list from the accounting system to a CSV file.
- Download and open the Track1099 Excel Import template and copy/paste data from your accounting software into the appropriate columns from.
- Save the populated Excel template as Track1099ImportFile.CSV.
- Go into Track1099 and go to the Import tab and follow the steps to Import from CSV.
- Once you’ve finished importing your vendors and payment amounts, you should review each of the 1099s before sending them. Make sure you verify that the “Second Name” field in Track1099 includes the “dba <companyname>” text, or the 1099 may be rejected by the IRS.
What it Costs:
In my small example, I processed 1099s for 11 vendors and paid just $26.50. Compare that with purchasing 1099 forms/envelopes at Office Depot (best price I could find) for $15 plus $4.50 postage, plus $50 worth of setup time, printing, and envelope stuffing. I estimate the costs of preparing 1099s on paper to be around $15+4.50+50=$69.50, which represents a savings of $43.00. Pretty compelling in my opinion.