How to Create 1099 Forms

Federal 1099 tax forms are provided to contractors and individuals earning non-wage revenue. Many accounting and tax preparation applications will walk you through the process to prepare 1099 and 1096 forms (a 1096 is the information form that goes with a 1099). 1099 forms are also available through the Internal Revenue Service, if you need to fill them out by hand. To prepare 1099s for contractors, make sure you have their contact and personal information (which they would have submitted to you on a W-9 form when you hired them), along with documentation of payment (invoice or check stubs for service).

Difficulty: Moderate

Instructions

Things You'll Need:

• Documentation (W-9, invoices)

1. Select "1099 Reporter" in your accounting application, such as QuickBooks, or in your tax preparation software, such asTurboTax, to launch the PC wizard. The 1099 Reporter for Mac is not currently a part of the software; Intuit, which makes both QuickBooks and TurboTax applications, provides a 1099 On-line Reporter.

2. Type the following information in the fields: your name, company name and mailing address; your Social Security or tax ID number; contractor or company name (recipient); recipient's mailing address; recipient's Social Security or tax ID number.
   If the software automatically populates this information, check it against your documentation (for example, the W-9 may have a company name or different mailing address).

3. Calculate the total amount paid to the contractor, and type this number for box 7 (non-employee compensation). The wizard will also walk you through any other payments or withholding amounts you issued for the contractor, such as state and federal taxes. Accounting software will calculate the total amount paid for contractors according to the entries in the electronic ledger.

4. Print the form and instructions for mailing. The 1099 Reporter will generate the necessary 1096 information return for the IRS, along with copies to submit to your contractor and to file with your taxes.

Tips & Warnings

• Check all payment amounts and information against backup documentation to avoid sending revised forms later.
• The Internal Revenue Service specifies deadlines for filing information returns and 1099 forms to contractors. Plan enough time to prepare the forms, to get any backup documentation and to mail the documents.

References

• IRS.gov: Information returns
• TurboTax 1099 On-line Reporter
• Setting up QuickBooks for reporting payments on Form 1099-MISC and 1096

Resources

• IRS.gov: Order forms and documents