1099 Tracking in QuickBooks

A 1099 tax form needs to be issued by January 31st to any unincorporated vendor you paid $600 or more during the past calendar year.  As we approach the end of the year, now is a good time to be proactive and take some simple measures to ensure efficiency and accuracy of the 1099 filing process.

It can be a tedious task to go back through the past 12 months and figure out who needs to be issued a form 1099 and the amount for which it should be issued.  Fortunately for those utilizing QuickBooks as their accounting software, this process has been automated, making it easy to track payments to 1099 contractors behind the scenes.

Since the accuracy of reports generated by QuickBooks is limited by the accuracy of data entered, there are a few things that need to be done to ensure the accuracy of the 1099 tracking and reporting in QuickBooks.


Here is some information on how to set up QuickBooks to most efficiently gather 1099 information:

Those using the Desktop version of QuickBooks should follow these steps to ensure the file is set up properly for tracking and reporting of 1099 contractor payments:

  • The first and most important step is to get your contractors to fill out a W-9.This form is used to gather the information required to properly prepare and issue a 1099 form.  We recommend obtaining a completed W-9 form from each new contractor before releasing any additional payments.  For existing contractors who have not provided a completed W-9 form to date, this is a great time to have them fill one out.
  • The second step would be to turn on 1099 Tracking in QuickBooks.
    1. From the Edit menu, go to Preferences.
    2. Scroll down on the left menu to find and select Tax:1099.
    3. Once the Tax:1099 menu opens, select the Company Preferences tab at the top.
    4. Select the Yes radio button next to “Do you file 1099-MISC forms?”
    5. Select OK on the right to save your changes.
  • The third step is to ensure all contractors are set up as vendors in QuickBooks. When running the 1099 report at the end of the year, QuickBooks will only report payments made to vendors who are set up for 1099 tracking.  If a contractor is set up as an employee, customer, or other name, the payments made to those contractors will not be included on the 1099 report.  To correct this issue:
    1. Go to Vendors on the top ribbon and select Vendor Center.
    2. Click on New Vendor. This will open the new vendor information screen.
    3. Select the Address Info tab on the left and fill in the vendor name, contact information, and address. If the vendor is an individual, enter the individual’s name in the First Name, Middle Initial, and Last Name fields.
    4. Select the Tax Settings tab on the left side and fill in the Vendor’s Tax ID or SSN if an individual (this will be on the completed form W-9) and check the box next to Vendor eligible for 1099.
    5. Select OK on the bottom to save.

Now the contractor is set up correctly and QuickBooks will start tracking the payments made to this contractor.


Those using QuickBooks Online should follow these steps to ensure the file is set up properly for tracking and reporting of 1099 contractor payments:

  • The first and most important step is to get your contractors to fill out a W-9. This form is used to gather the information required to properly prepare and issue a 1099 form.  We recommend obtaining a completed W-9 form from each new contractor before releasing any payments.  For existing contractors who have not provided a completed W-9 form to date, this is a great time to have them fill one out.
  • Ensure all contractors are set up as vendors in QuickBooks. When running the 1099 report at the end of the year, QuickBooks will only report payments made to vendors who are set up for 1099 tracking.  If a contractor is set up as an employee, customer, or other name, the payments made to those contractors will not be included on the 1099 report.  To correct this:
    1. Find the Expenses menu on the left and go to Vendors.
    2. Select New vendor. A vendor information screen will appear.
    3. Fill in the Company name and address. If the vendor is an individual, fill in the First name, Middle name, and Last name fields.
    4. Enter the Tax ID or Social Security Number in the Business ID No. / Social Security No. field and check the box to Track payments for 1099.
    5. A PDF copy of the vendor’s completed W-9 form can be saved in the profile by dragging and dropping the file into the Attachments section.
    6. Select Save to save and exit.

QuickBooks Online also offers the ability to send a request for W-9 information to a vendor directly from QuickBooks.

To do so:

  1. Find the Payroll / Workers menu on the left and select Contractors.
  2. Click Add a contractor.
  3. Enter the vendor’s name and e-mail address.
  4. Check the box to Email this contractor to complete their profile and click Add contractor.
  5. QuickBooks will now send a request to the vendor to provide the W-9 details and will import that information to the contractor’s profile once received.

For additional information or assistance reach out to Sadchit Desai at [email protected].



Get in touch with Sax by filling out the form below: