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Income Tax and 1099 Preparation and Reporting

Preparing income tax forms and 1099s are two of the most common ways in which practitioners become involved with their clients' QuickBooks data. This guide provides practitioners with useful information for preparing income tax forms and 1099s using QuickBooks. Specifically, it explains how to set up QuickBooks to properly track income tax and 1099 information and how to solve common problems related to reporting on that information.

Income Tax Tracking QuickBooks does not generate income tax returns. However, QuickBooks may be used to track the information needed to prepare income tax forms. The QuickBooks income tax data can be imported automatically into Intuit's tax software. TurboTax, TurboTax for Business, ProSeries, and Lacerte all can import tax-related QuickBooks data directly. There is no need to create an intermediate file. To import QuickBooks data into those products, start the tax software and, when prompted, import the QuickBooks company file (see the tax software user guide for details on importing). After importing the QuickBooks company file into the tax software, check the QuickBooks income tax reports against the tax reports in the tax software. In addition, if the user has ProSeries or Lacerte installed on the same computer as QuickBooks, QuickBooks data can be exported to those software programs directly from QuickBooks. Linking QuickBooks Accounts to Tax Forms A tax line should be associated with each account. If done correctly, tax data can then easily be imported into TurboTax, TurboTax for Business, ProSeries, and Lacerte. In addition, tax reports can be created in QuickBooks that will help fill out tax forms. (The reports show the amounts to fill in for each tax line on the tax forms.) QuickBooks data may be imported into these products only for the most recent tax year. For example, QuickBooks 2016 will work with TurboTax, TurboTax for Business, ProSeries, and Lacerte only for tax year 2015. As discussed, QuickBooks can be used to link general ledger accounts to specific lines on income tax forms. When the company was set up either manually (Express Start) or with the EasyStep Interview, and the appropriate business entity and a preset chart of accounts were selected, the accounts already have tax line assignments. However, if accounts have been added to the chart of accounts, they are not automatically assigned to tax lines. Users must assign tax lines. QuickBooks cannot link accounts to income tax forms if users select “Other/None” as the business entity type form. However, users who initially select “Other/None” subsequently can specify the applicable tax form by selecting “My Company” from the “Company” menu. If users subsequently specify a different tax form, QuickBooks resets all of the links between the general ledger accounts and the income tax lines to “Unassigned.” Consequently, users must link general ledger accounts to the applicable lines on the specified tax form manually. Likewise, users who add accounts to QuickBooks' preset chart of accounts or set up their own charts of accounts also must link general ledger accounts to the applicable lines on the specified tax form manually. In addition, users who select Forms 990, 990-PF, or 990-T as the income tax form must link general ledger accounts to lines on the nonprofit tax forms manually.

Linking General Ledger Accounts to Lines on Income Tax Forms

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Practitioners should assist their clients in linking general ledger accounts to the appropriate lines on income tax forms (QuickBooks allows practitioners to use the accountant's copy to link general ledger accounts to the appropriate income tax form lines and to edit existing links.), particularly if the QuickBooks files will be used to prepare income tax forms. When the company was set up either manually (Express Start) or with the “EasyStep Interview” and the appropriate business entity and a preset chart of accounts were selected, the accounts already have tax line assignments. However, if accounts have been added to the chart of accounts, they are not automatically assigned to tax lines. QuickBooks users who add accounts to a preset chart of accounts, or set up their own charts of accounts can link tax-related general ledger accounts to specific income tax form lines manually. To do so: Select “Chart of Accounts” from the “Lists” menu.

Select the account to be linked to a specific line on the income tax form.

Click the “Account” button and select “New” or “Edit” from the drop-down list.

Select the applicable “Tax Line” from the drop-down list in the “Add New Account” or “Edit Account” window. “Not tax related” should be selected if the account is not reported on the applicable income tax form. The “Tax Line” drop-down list does not appear in the “Edit Account” window if the user has not selected a tax form for the company.

QuickBooks users who have set up their own charts of accounts or changed the specified tax form may find it helpful to create a “dummy” company using the QuickBooks preset chart of accounts for their particular industry to see what income tax form lines QuickBooks assigns to certain general ledger accounts. To create a “dummy” company, users should: Select “New Company” from the “File” menu.

Click the “Express Start” button.

Enter the name of the “dummy” company in the “Tell us about your business” screen.

Select the type of business that is most similar to the user's business from the “Industry” list in the “Tell us about your business” screen.

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Select the applicable company type in the “Tell us about your business” screen.

Create the file for the “dummy” company.

Display the “dummy” company's chart of accounts by selecting “Chart of Accounts” from the “Lists” menu.

Select “Account Listing” from the “Report” button.

Locate accounts in the chart of accounts for the “dummy” company that track the same type of income or expense as the accounts set up by the user. The account names do not have to be the same.

Use the “Income Tax Line” information in the “dummy” chart of accounts to assign income tax lines to the corresponding accounts set up by the user.

QuickBooks users who file Form 1040 need only assign income tax lines to income and expense accounts. Those users need not assign tax lines to balance sheet accounts. However, users that file Forms 1120, 1120S, or 1065 should assign income tax lines on Schedule L to applicable balance sheet accounts.

Linking Payroll Expense Accounts to Income Tax Forms QuickBooks users should create separate payroll subaccounts for each type of payroll expense reported on income tax forms. Examples of payroll expenses that may need to be reported separately on income tax forms include officers compensation, commissions, pension and profit-sharing plans, and employee benefits. Users setting up payroll subaccounts should: Select “Chart of Accounts” from the “Lists” menu.

Select “New” from the “Account” menu button.

Select “Expense” in the “Add New Account: Choose Account Type” window.

Enter the name of the expense subaccount and click the “Subaccount of” check box and select “Payroll Expenses” from the adjacent drop-down list.

Select the applicable “Tax Line Mapping” from the drop-down list.

The following illustrates the “Add New Account” window:

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New payroll subaccounts should be assigned to the applicable payroll items by selecting “Payroll Item List” from the “Lists” menu and editing existing payroll items or creating new payroll items and then assigning the payroll expense subaccount as the expense account for the item. QuickBooks users that file Forms 1120 or 1120S must report officers' compensation separately from employees' salaries and wages. To track officers' compensation separately from other compensation, users should: Select “Payroll Item List” from the “Lists” menu, click the “Payroll Item” button, and choose “New”

to add payroll items for officers' salary, officers' sick salary, and officers' vacation salary.

Click “Employee Center” on the toolbar, select the employee, and click the “Edit” button with a pencil icon.

For each applicable employee, select “Officer” from the “Type” drop-down list in the “Employment Info” tab.

Select the payroll item for officers' salary from the “Item Name” drop-down list in the “Earnings” section of the “Payroll Info” tab.

QuickBooks users can generate reports reflecting officers' salaries by selecting “Employees & Payroll” and “Payroll Item Detail” from the “Reports” menu.

Linking Depreciation Expense to Income Tax Forms The IRS requires taxpayers to calculate depreciation expense on a tax form worksheet. Consequently, the depreciation expense in QuickBooks cannot be used on income tax forms or linked to an income tax line (except for linking depreciation expense for partnerships to the Schedule M-1 “Depreciation per books” line).

Generating Income Tax Reports QuickBooks users can generate a report that may be used to prepare income tax forms by selecting “Accountant & Taxes” and “Income Tax Summary” from the “Reports” menu. The “Income Tax Summary” report reflects the amounts that QuickBooks recorded for each tax line on the tax form specified by the user. When generating the report, users should verify that the report specifies the correct date range. Users then can use the information on the report to verify income tax form line assignments and account distributions. To check and correct income tax line assignments using the “Income Tax Summary” report (QuickBooks users also can generate the “Income Tax Preparation” report to verify tax line assignments), users should: Double-click on the amount for “Tax line unassigned (income/expense)” at the end of the report.

This generates the “Tax Line By Account” report that lists all income and expense transactions for which a tax line has not been assigned.

Check the “Tax Line By Account” report for accounts that should be reported in the company's income tax form. (Note that some accounts may not be tax-related. It is not necessary to assign tax lines for those accounts with amounts that are not reported on income tax forms. The tax line for those accounts can remain “Unassigned” or be changed to “Not tax related.”)

Select “Chart of Accounts” from the “Lists” menu and edit the applicable account by selecting the appropriate “Tax Line Mapping” from the drop-down list in the “Edit Account” window.

Return to the “Income Tax Summary” report after correcting any missing or incorrect tax line assignments in the chart of accounts and “Refresh” the report to verify that it has been updated appropriately.

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To check and correct account distributions using the “Income Tax Summary” report, users should: Double-click on any amount that seems incorrect. This generates the “Tax Line By Account” report.

Check the “Tax Line By Account” report for amounts that were distributed to the wrong income or expense account.

If an income amount is not distributed to the correct account, select “Item List” from the “Lists” menu and enter the correct income account in the “Edit Item” window.

If an expense amount is not distributed to the correct account, double-click the amount in the “Tax Line By Account” report to display the related transaction and select the correct expense account in the “Expenses” tab for non-payroll items and in the “Other Payroll Items” window of paychecks.

QuickBooks users should print the “Income Tax Summary” report after verifying the accuracy of the amounts, account distributions, and tax line assignments. The amounts in the report can be used to prepare income tax forms. QuickBooks users also can use the “Income Tax Summary” report to obtain the amounts to be reported on income tax forms for gross sales and returns and allowances. The “Income Tax Summary” report automatically prints totals for “Gross receipts or sales” and “Returns and allowances” if income and discount accounts in the chart of accounts have been appropriately linked to the tax lines for “Income: Gross receipts or sales” and “Income: Returns and allowances.” The “Gross receipts or sales” amount in the “Income Tax Summary” report should be the total of all sales for the tax year, net of any returns entered as credit memos or refund checks. The “Returns and allowances” amount should be the total of all discounts, including those entered as separate line items on sales forms and those given for early payments. QuickBooks users can use the sales and returns information in the “Income Tax Summary” report to prepare income tax forms as follows: Double-click the “Gross receipts or sales” amount. This generates the “Tax Line By Account” report.

Click the “Customize Report” button in the “Tax Line By Account” report and check “Debit” and “Credit” in the “Columns” drop-down list on the “Display” tab.

Enter the total amount in the “Credit” column as gross sales in the income tax form.

Add the total amount in the “Debit” column to the total amount for “Returns and allowances” in the “Income Tax Summary” report and enter the results as returns and allowances in the income tax form.

Subtract the previously calculated amount for returns and allowances from the previously calculated amount for gross sales and enter the result as net sales in the income tax form. The net sales amount should equal the “Gross receipts or sales” amount less the “Returns and allowances” amount in the “Income Tax Summary” report.

QuickBooks users can generate the “Income Tax Summary” report to verify tax line assignments. QuickBooks also allows users to generate the “Income Tax Preparation” report to quickly verify that general ledger accounts are associated with the correct income tax lines. Users generate the report by selecting “Accountant & Taxes” and “Income Tax Preparation” from the “Reports” menu. The “Income Tax Preparation” report contains columns for each account in the chart of accounts, sorted by account type” (i.e., income, expense, etc.). The report lists the tax line associated with each general ledger account. Users can quickly review this report to check for unassigned and incorrect tax lines.

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Note: QuickBooks Accountant Desktop includes the amounts for each tax report line in the “Income Tax Preparation” report.

QuickBooks users can also generate the “Income Tax Detail” report to review the detail transactions for each tax line amount. Users generate the report by selecting “Accountant & Taxes” and “Income Tax Detail” from the “Reports” menu. The “Income Tax Detail” report is sorted by income tax line and lists detail information (including the general ledger account) for each transaction associated with the income tax line. Users can double-click on any amount in the report to view further details about the transaction.

Note: QuickBooks Accountant Desktop condenses this report into one-line summaries of transactions. Users needing additional detail about a transaction can double-click on it and the details will display.

When generating income tax reports in QuickBooks, users always should verify that the correct period and date range are specified. In addition, users should verify that the reporting preference is set to the appropriate method the company uses for income tax reporting (i.e., cash or accrual). Users can verify or change the reporting preference by selecting “Preferences” from the “Edit” menu and then selecting “Reports & Graphs” from the “Preferences” scroll box and clicking on the “Company Preferences” tab.

Reporting Income Taxes As discussed, QuickBooks does not generate income tax forms. However, QuickBooks users can enter the verified tax line amounts from the “Income Tax Summary” report in the appropriate lines of income tax forms. Alternatively, QuickBooks users can transfer income tax information from QuickBooks directly to Intuit tax software.

1099 Preparation and Reporting

Overview The IRS requires companies to exclude from Form 1099-MISC any payments they made by credit card, debit card, gift card, or PayPal. Those payments will be reported by third-party payment processors such as credit card companies, PayPal, etc. on Form 1099-K. (Small business owners do not file a 1099-K form.) The 1099 Wizard in QuickBooks complies with this requirement.

Setting up 1099 Preferences QuickBooks users that file Form 1099-MISC, Miscellaneous Income, can track 1099-related payments by setting up 1099 preferences. Users can set up 1099 preferences by selecting “Preferences” from the “Edit” menu and then selecting “Tax: 1099” from the “Preferences” scroll box. Users that file 1099-MISC forms should check “Yes” to the question, “Do you file 1099-MISC forms?” on the “Company Preferences” tab. In the “Company Preferences” tab, users can also select the link to begin the 1099 wizard. As discussed, practitioners can use the accountant's copy in QuickBooks to set up their client's 1099 preferences. Setting up 1099 Vendors QuickBooks users should set up 1099 vendors as follows: Click “Vendor Center” on the toolbar. (QuickBooks only tracks 1099 information for names on the

“Vendor List.” The “Other Names List” should not be used to set up 1099 vendors.)

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Edit the “Tax Settings” tab for vendors that should receive 1099-MISC forms. To do so, highlight the vendor that should receive a 1099-MISC form and click the “Edit” button. Click on the “Tax Settings” tab.

Enter the vendor's “Tax ID” number and check the “Vendor eligible for 1099” box. (The box will not display if the 1099 preferences have not been set up.) If the vendor is an individual (i.e., a sole proprietor), the person's social security number should be entered as the taxpayer identification number. If the vendor is a company, the company's nine-digit federal taxpayer identification number should be entered.

Users also should edit the information in the vendor's “Address Info” tab to verify that the vendor's address contains the state abbreviation and zip code. The IRS requires complete address information for 1099 vendors. If the vendor is an individual (i.e., a sole proprietor), the vendor's name should be entered in the first name, middle initial, and last name fields. The IRS matches the vendor's social security number with the person's name rather than the company's name.

Maintaining 1099 Information QuickBooks automatically adds each payment to a 1099 vendor to the total to be reported on the vendor's 1099-MISC form if the payment is charged to a general ledger account that is linked to a 1099 category. Payments that are not charged to an account linked to a 1099 category are not included in 1099 totals even if the vendor is set up as a 1099 vendor. If a payment to a 1099 vendor should not be reported on Form 1099-MISC, the payment should be charged to an account that is not linked to a 1099 category.

Reviewing, Filing, and Printing 1099s via 1099 Wizard Before starting the 1099 wizard, users should verify the accuracy of the company's address, phone number, and federal taxpayer identification number. QuickBooks does not print the state identification number on Form 1099-MISC since the IRS does not require that information. That information can be verified and edited by selecting “My Company” from the “Company” menu. The IRS requires companies to include their phone number on Form 1099-MISC. The following paragraphs discuss the procedures for 1099 preparation and reporting. To begin the 1099 wizard, select “Print/E-file 1099s” and then “1099 Wizard” from the “Vendors” menu. As discussed, practitioners can use the accountant's copy in QuickBooks to print 1099 forms and to make changes to 1099 preferences. (Alternatively, the wizard can be started by clicking the link on the “Company Preferences” tab of the “Tax 1099” preference.) As illustrated below, users can select 1099 vendors, verify vendor information, map accounts, review vendor payments, review amounts to be reported on the 1099, and print and file 1099s with the 1099 wizard.

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Select 1099 Vendors. After clicking “Get Started,” the first screen allows users to select 1099 vendors. All vendors for whom Form 1099-MISC should be prepared should have a checkmark showing in the “Create Form 1099-MISC” column. (As discussed, QuickBooks only tracks 1099 information for names on the “Vendor List.” The Other Names List” should not be used to set up 1099 vendors.) If the vendor has already been set up as a 1099 vendor there will already be a check mark next to their name. If the user makes changes in this screen the vendor's 1099 status will also change in the company file (i.e. if the user places a checkmark next to a vendor in this screen there will be a check next to the “Vendor eligible for 1099” box in the “Tax Settings” tab for that vendor).

Verify 1099 Vendor Information. After selecting vendors, the next screen allows users to verify the vendors' taxpayer identification numbers and addresses. A vendor's street address, city, state, and zip code must be printed on Form 1099-MISC. Users can correct missing or incorrect addresses and taxpayer identification numbers on this screen. Any corrections made on the screen automatically update the vendor's record. Entering information in the “Company Name” field is unnecessary if the company's legal name is specified in the “Vendor Name” field. However, users may want to enter information in the “Company Name” field if the vendor is an individual (i.e., a sole proprietor) and the company name differs from the individual's name. If the user chooses to enter information in the “Company Name” field, the company's legal name should be entered. If the vendor is an individual, users must enter the person's legal name in the “First Name,” “M.I.,” and “Last Name” fields. Those vendors should use their social security numbers as their taxpayer identification numbers. QuickBooks automatically prints the individual's name and company name in the address box. Users that retain those lines in the address should verify that the names exactly match the information in the “Company Name” and individual name fields. If the user enters more than one line for the vendor's street address, QuickBooks combines the information into one line for the street address when 1099s are printed.

Map General Ledger Accounts. In the next screen, QuickBooks displays all of the accounts (from the QuickBooks chart of accounts) that were used to pay vendors marked as 1099 vendors. To report payments to 1099 vendors on Forms 1099-MISC, users need to map each QuickBooks account (or subaccounts) that was used to pay a 1099

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vendor to the appropriate box on Form 1099-MISC. Users can assign accounts even if they are not ready to create 1099s by selecting “Preferences” from the “Edit” menu, selecting “Tax:1099” from the “Preferences” scroll box and in the “Company Preferences” tab click the link to map accounts. Users must have already clicked “Yes” to the question “Do you file 1099-MISC forms?” This opens the “Map vendor payment accounts” screen of the 1099 wizard. Users can map accounts and click on “Save & Close.” Users should select applicable subaccounts to be linked to 1099 categories. Even if the primary account is selected, QuickBooks does not link subaccounts to the specified 1099 category unless the user specifically selects the subaccounts.

The user should indicate where the amounts should appear on Form 1099-MISC by clicking the drop-down arrow to display the list of boxes, or payment categories, on the 1099, and choose the box where payments from the account should be reported if they exceed the IRS's minimum threshold amount for that category. Many businesses report 1099 payments primarily in the “Box 7: Nonemployee Compensation” category. Even though one 1099 category can be linked to multiple general ledger accounts, each account can be linked to only one 1099 category. For example, the account for professional fees cannot be linked to both the nonemployee compensation category and the royalties category. After indicating where the amounts should appear on Form 1099-MISC, users should verify the threshold amounts for 1099 reporting purposes by clicking on the “Show IRS 1099-MISC filing thresholds” link. Users can click on the “Reset to IRS thresholds” button to reset the threshold amounts established by the federal government as of the date the user's copy of QuickBooks was manufactured. However, users should verify that those amounts are current. The threshold values represent the minimum that must have been paid to the 1099 vendor in each 1099 category to be required to file a Form 1099-MISC for that vendor. If a 1099 vendor was paid less than the threshold, a 1099-MISC form does not need to be filed for that vendor.

Exclude Nonreportable Payments. As discussed, the IRS requires businesses to exclude from Form 1099-MISC any payments made by credit card, debit card, gift card, or third-party payment network such as PayPal. (These payments are being reported by the card issuers and third-party payment networks on Form 1099-K.) On the “Review payments for exclusions” screen of the 1099 Wizard users can view included and excluded payments. If users click on the “View Included Payments” button, QuickBooks lists all the vendor payments that will be included on Forms 1099-MISC. Users should review this list and verify that no payments were made using credit cards, debit cards, gift cards, or PayPal. If there are any such payments, users should double-click the payment to open the source document and edit the check number field to include one of the following QuickBooks recognized notations (limited to 8 characters): Debit

Debitcar

DBT

DBT card

DCard

Debit cd

Visa

Masterc

MC

MCard

10

Chase

Discover

Diners

PayPal

QuickBooks automatically excludes from Form 1099-MISC, any “Write Check” payment containing one of those notations. QuickBooks automatically excludes from Form 1099-MISC any “Pay Bills” payment made using the credit card payment method. Also, in the “Review payments for exclusions” screen of the 1099 Wizard, users should view excluded payments by clicking on the “View Excluded Payments” button. QuickBooks shows all the vendor payments that are automatically excluded from Forms 1099-MISC. This list should be reviewed to verify that there are no payments that should be included.

Confirm 1099 Entries. On the next screen, users will confirm their 1099 entries. On the “Confirm your 1099 entries” screen, QuickBooks displays each of the vendors for which Form 1099-MISC will be created. It also displays those vendors with payments that are below the thresholds, however these vendors will not have a Form 1099-MISC prepared for them. The following is displayed:

the payment amounts applied to each box on the 1099,

the total of all payments included on the 1099 (If the payments to a vendor in any category do not exceed the IRS's minimum threshold amount for that category, the box on the 1099 is empty.),

the total of all payments from unmapped accounts, and

the total of included payments and payments from unmapped accounts during the reporting period

If any of the amounts on the “Confirm your 1099 entries” screen seem incorrect, users can double-click the row to see the “1099 Detail” report. This report contains the data that will be included on the 1099. The user can then double-click any line on the “1099 Detail” report to review the transactions. After confirming that all of the amounts are correct, users should click “Continue.”

Print or E-file 1099s. On the next screen users can print or e-file their 1099s. If users decide to print their Forms 1099, they should do the following: Click the “Print 1099s” button.

Specify the correct date range in the “Printing 1099-MISC and 1096 Forms” window and click “OK.”

In the “Select 1099s to Print” window, verify that each vendor for which a Form 1099-MISC should be printed is checked.

Click the “Preview 1099” button in the “Select 1099s to Print” window.

Click the “Print” button in the “Print Preview” window to print the 1099s on blank paper.

After reviewing the 1099s for accuracy and making any necessary corrections click “Print 1099” and print the 1099-MISC forms on preprinted forms (QuickBooks must be in the single-user mode to print 1099s).

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Form 1099-MISC must be transmitted to applicable vendors by January 31 each year. QuickBooks allows users to prepare 1099s and print them on IRS-approved forms. The forms cannot be printed on blank paper. QuickBooks allows users to print up to 249 Forms 1099-MISC. The IRS requires users who file more than 249 forms to file electronically. Companies must file Copy A of Forms 1099-MISC with the IRS by the last day of January. If users decide to e-file their Forms 1099, they should click on the “Go to 1099 E-File Service” button. Users can file their Forms 1099-MISC electronically with the IRS and print copies on plain paper for their files and to send to 1099 vendors. The Intuit 1099 E-File Service supports the same Form 1099-MISC boxes that QuickBooks supports and for certain states, the IRS shares e-filed information with the state agency, simplifying state filings. Only the QuickBooks Administrator or the External Accountant can e-file Forms 1099 and QuickBooks must be in single-user mode.

Printing 1096s Form 1096, Annual Summary and Transmittal of U.S. Information Returns, must be transmitted to the IRS along with Copy A of Forms 1099-MISC. The “1096 Summary Information” at the bottom of the “Select 1099s to Print” window specifies the number of vendors selected for 1099 printing and the total amount of 1099 payments for those vendors. Verify that information before printing Form 1096. QuickBooks users should also verify that the company's name, address, and taxpayer identification number are correct. To print Form 1096 users should do the following:

If not already open, start the 1099 wizard by selecting, “Print/E-file 1099s” and then “1099 Wizard”

from the “Vendors” menu. Click through to the last screen and click the “Print 1099s” button.

Specify the correct date range in the “Printing 1099-MISC and 1096 Forms” window and click “OK.”

In the “Select 1099s to Print” window, verify that each vendor for which a Form 1099-MISC was created is checked. (Verify the “1096 Summary Information” located at the bottom of the “Select 1099s to Print” window.)

Click the “Print 1096” button.

Enter a contact name on the “1096 Information” window and, if applicable, check the “This is my Final Return” box.

In the “Print 1096” window, click “Preview” to review the Form 1096 and then click “Print.”

Correcting 1099s and 1096s If an error is detected on a vendor's Form 1099-MISC (or if the user realizes Form 1099-MISC was not printed for a vendor) before Forms 1099-MISC and Form 1096 are filed with the IRS, QuickBooks users should make any necessary corrections and perform the following procedures to issue corrected 1099 forms: Start the 1099 wizard by selecting, “Print/E-file 1099s” and then “1099 Wizard” from the

“Vendors” menu. Click through to the last screen and click the “Print 1099s” button.

Specify the correct date range in the “Printing 1099-MISC and 1096 Forms” window and click “OK.”

Note the “1096 Summary Information” at the bottom of the “Select 1099s to Print” window. QuickBooks automatically updates that information to reflect any corrections.

Select only those vendors that need to receive a new Form 1099-MISC (either because the first 1099 was incorrect or because a 1099 was not generated previously).

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Preview and print the selected 1099s. Do not reprint 1099s for all vendors (unless corrections are being made for all vendors).

If Form 1096 already has been printed, it must be reprinted after selecting all vendors for whom Form 1099 is being transmitted.

Give the corrected copy of Form 1099-MISC to the vendor after manually marking an “X” in the “Corrected” box at the top of the vendor's copies.

Void Copy A of the original Form 1099-MISC by manually marking an “X” in the “Void” box at the top of the form.

Send the voided original Copy A, the corrected Copy A, and the new Form 1096 to the IRS when all of the Forms 1099-MISC are filed. The corrected Copy A should not be marked corrected.

When an error is detected on a vendor's Form 1099-MISC after filing Forms 1099-MISC and 1096 with the IRS, the correction process depends on the type of error. If the original 1099 did not include a taxpayer identification number or included an incorrect number or name and an incorrect address, QuickBooks users should generate two new 1099 forms, as follows: Manually create the first new Form 1099-MISC by (a) entering an “X” in the “Corrected” box at the

top of the form; (b) entering the payer, recipient, and account number information exactly as it appeared on the original incorrect form; and (c) entering “0” (zero) for all money amounts.

Correct the information in QuickBooks and use QuickBooks to print the second new Form 1099-MISC. Include all the correct information on this form (including the correct taxpayer identification number, name, and address). Do not enter an “X” in the “Corrected” box at the top of this form.

Prepare a new Form 1096, and manually write “Filed To Correct TIN, Name, and/or Address” in the bottom margin of the form.

File Form 1096 and Copy A of the two new Forms 1099-MISC with the IRS. Do not include a copy of the original return that was filed incorrectly.

If the original 1099 was filed when a form should not have been filed or if it included an incorrect money amount or address, QuickBooks users should generate one new 1099 form, as follows: Correct the information in QuickBooks and use QuickBooks to print the new Form 1099-MISC.

Include the payer, recipient, and account number information exactly as it appeared on the original incorrect form. However, include the recipient's correct address and all correct money amounts as they should have appeared on the original form.

Mark an “X” in the “Corrected” box at the top of the form.

Prepare a new Form 1096.

File Form 1096 and Copy A of the new Form 1099-MISC with the IRS. Do not include a copy of the original return that was filed incorrectly.