Small Business

Prepare Your Form 1099 MISC Online and Paperless

Written by Doug Sleeter

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.

track1099

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.”

track1099 Connect to QuickBooks

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.

Intuit login

If you have multiple company files in the Intuit cloud, you need to select the one to work with.

Select your QuickBooks file

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.

Update your 1099 info

To review the individual vendors and their forms, click on 1099 Summary.

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.

individual 1099 record

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.

E-File 1099

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.

Monitoring E-Filed 1099s

If you would like to print copies, you can click on any one of the recipients and click “Print Form.”

Print 1099's

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:

email notification

The link takes them to a page where they can retrieve their 1099.

Receiving your 1099

Here’s a sample of what they would see once they connect:

Vendor 1099

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:

  1. Export the 1099 vendor list from the accounting system to a CSV file.
  2. Download and open the Track1099 Excel Import template and copy/paste data from your accounting software into the appropriate columns from.
  3. Save the populated Excel template as Track1099ImportFile.CSV.
  4. Go into Track1099 and go to the Import tab and follow the steps to Import from CSV.
  5. 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.

 


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About the author

Doug Sleeter

DougSleeter (@dougsleeter) is the founder and former CEO of The Sleeter Group, an international network of accounting software consultants, and the former producer of SleeterCon, an annual conference and tradeshow for accounting professionals.

In 2015, he sold The Sleeter Group to Diversified Communications (www.divcom.com) and the company has since become The Accountex Network.

He is a passionate leader of innovation and change in the small business accounting technology world. As a CPA firm veteran and former Apple Computer Evangelist, he melded his two great passions (accounting and technology) to guide developers in the innovation of new products and to educate and lead accounting professionals who serve small businesses.

Always in search of the next big thing, he is currently focusing on digital currencies and blockchain technology. He believes these technologies will change virtually everything in global commerce.

The CPA Practice Advisor recognized Doug as one of the "Top 25 Thought Leaders" in the accounting profession and he has been named to Accounting Today's "Top 100 Most Influential People in Accounting" each year 2008 through 2015. In 2013, he was recognized by Small Business Trends with the Small Business Influence Champion award.

In the early 1990s, Doug was a pioneer in developing the first QuickBooks seminars in the country and has since built the largest group of accounting software consultants in the small business accounting profession. Doug serves on several advisory boards for technology companies and has consulted with numerous industry leaders including Intuit, Sage, Apple, and Adobe Systems. 

Doug is the author of numerous books and courseware materials including The QuickBooks Consultant’s Reference Guide, and QuickBooks Complete, a college textbook.
 
Doug attended both the University of California Santa Cruz and Santa Clara University and holds a Bachelor of Arts degree in Computer Information Systems. Doug and his family live in Pleasanton, CA. Doug's hobbies include woodworking, golf, and lifelong learning.

22 Comments

  • Nice over view of the program and how it works.

    {quote}Due to limitations Vendor and Company SSNs are often not available depending on version.{unquote} re QBD

    So basically you can not rely on the interface and must physically check each to be sure it is correct. That would mean opening QB, and reading back and forth between the two to insure it is correct, or using a report you print from QB.

    Your $50 of set up time: printing (you can be doing something else not sure how you can quantify this), stuffing envelopes for 11 forms, 12 envelopes then (11 1099s and one 1096).

    Why is there no charge for the time to upload, review, and correct if necessary, the cloud application?

    Seems to me if you are going to compare the “costs”, both activities used up time and **both** should be charged accordingly.

    remove your dubious $50 of time for local printing and stuffing envelopes, and I don’t see a “huge value” – at least in terms of saving me money, I see a loss.
    Jim

    • We used Quickbooks for windows using Tax1099.com this year and it worked great. I had to download and use a plugin but recently they have notified of integrated QuickBooks for Windows and sure enough it imports every thing (SSN/EIN for payer and payee + box numbers and amounts)

      One limitation they have with QuickBooks online automated integration that is its not pulling box number but rest all data come from QBO to Tax1099.com just fine.

      Overall its saves a tons of headache from dual data entry. Also my QB 1099 filing was not available year round and Tax1099.com offers year round filing + prior years (as far as 2010 tax year)

      Since we are a QB pro advisor and always looking ways to cut down effort and cost on 1099 compliance, it always helps to find tools that can automate this task and help achieve overall profitability.

  • Hi Jim,

    Thanks for the comment. I see your points.

    You should review each field, just like you would on the printed forms, so I feel that’s a wash, time-wise.

    The proof of the amounts could be streamlined by getting a 1099 summary report from QB and comparing the amounts, starting with the total. If the total is correct, you gain confidence. If not, then check to find the ones that show different amounts.

    If you use the QB Sync Manager, pretty much ALL of the data comes over correctly, so there will be very few manual changes. Try it out and see. If you don’t like it, just don’t click “E-file” and you’ll never have to pay a thing…

    The absolutely biggest reason this is so valuable in my mind is that it’s all paperless, for both parties.

    Anyway, I think you’ll be impressed when/if you use it.

  • Hi Doug,

    Maybe I missed this – but is there a signature requirement for e-filing the 1096? Also, would I need a separate account for each of my clients?

    Thanks,

    Susan

    • According to Pub. 1220, Sec. 3.04, no 1096 is needed when you e-File 1099s.

      You do not need a separate account to file for your clients.

      You can set it up to do 1099s for multiple clients. When you first register, after clicking sign up on the home screen, choose “I handle filings for more than one company” – That allows you to import and manage multiple entities.

  • Someone asked today about whether payments to vendors using Bill.com should be reported on 1099 MISC, or whether they should be excluded because they would be reported no 1099 K.

    The answer is: Report payments made via bill.com on FORM 1099 MISC.

    One of our members researched this last year and concluded that “paying through the bank” only shows up on 1099K if the payor used a debit card. Any online bill payment activity is included on the 1099-Misc. With bill.com, there is no third party processor involved. The money goes from the payor’s bank account to bill.com’s escrow account, and then to the other party.

    It’s the same with wire transfers. They should be reported on 1099-misc.

  • Doug,

    Thank you for this awesome video demo of how to use Track1099. I am about to use. Hopefully I will be able to credit the Sleeter Group for using it, as i signed up a year ago but didn’t have the demo to use it.

  • I used this last night to do 4 1099’s from my two “companies” and it is much cheaper for me compared to having to buy paper forms. One question though- what if the recipient needs a form for their state or local tax return? The paper forms print out multiple copies for the payee.
    Thanks for your post

    • Will, I’m not a tax accountant or preparer (other than doing my own), but my understanding is that you don’t need to turn in a copy of your 1099’s with your tax forms. At least not in my state. In my case, I e-file anyways…

  • Thank you for this video. I was wondering how Track1099 determines who gets a 1099. We used Quickbooks and I have gone through the 1099 wizard to map the accounts, but I am worried I might have missed one. Is there a way to make sure you capture all of the accounts and vendors?

    • Track1099 and other similar integrated products are going to rely on QuickBooks for the information. They extract what QuickBooks sets up. So, to be sure, you have to understand what kinds of payments are eligible for 1099’s, and what kinds of vendors. I didn’t go into the details of the what kinds of payments you need to cover, that is something you would talk to an accounting professional about.

  • have been attempting for 2 days now to get my 1099 ‘s keep getting :

    “Thanks for using Track1099. We apologize, but our servers are very busy; please try again later today. You will be able to pick up your form.”

    I am happy I have tested your system prior to moving my company to you.

    This is not a good way to do biz. ll be posting this review on the web.

    Sam S

    • From what I understand there was a temporary glitch, which was rectified quickly. That is something that, unfortunately, does happen on occasion with SaaS products. Even the IRS e-file website was down for awhile recently.

  • a temporary glitch is not a 2 day issue and the responce i got was that client sent 3000 forms at once and the serves crashed. So if u can’t handel 3000 i will send my 800 via a vendor that can.

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