Filing 1099 forms doesn’t have to be stressful or time-consuming. With QuickBooks Online, businesses can prepare, e-file, and manage 1099-NEC and 1099-MISC forms using data that already exists in their accounts. Whether you work with independent contractors occasionally or manage dozens of vendors each year, QuickBooks simplifies compliance and helps you meet IRS requirements accurately and on time.
This comprehensive guide explains how to create and file 1099s with QuickBooks Online, outlines IRS rules you must know, and walks you through every step—from preparation to filing status tracking.
What Are 1099 Forms and Why They Matter?
A 1099 form reports income paid to nonemployees, such as freelancers, independent contractors, and service providers. The most common forms businesses use include:
- Form 1099-NEC: Reports nonemployee compensation
- Form 1099-MISC: Reports miscellaneous income such as rent or legal settlements
Failing to file accurate 1099s can lead to IRS penalties, delayed deductions, and unnecessary audits. QuickBooks Online helps eliminate errors by automating calculations and exclusions.
Benefits of Filing 1099s using QuickBooks Online
Using QuickBooks Online for 1099 filing offers several advantages:
- Automatically identifies eligible contractors
- Excludes non-reportable electronic payments
- Maps accounts to the correct 1099 boxes
- Allows e-filing for federal and some state forms
- Emails or mails contractor copies directly
- Tracks filing status in real time
Fees may apply, but the time savings and accuracy often outweigh the cost.
Important IRS Rules to Know Before You Start
Before preparing your 1099s in QuickBooks Online, keep these critical IRS guidelines in mind:
- 1099-NEC Filing Threshold: You must file Form 1099-NEC for each nonemployee paid $600 or more in cash, check, or direct deposit during the previous tax year. Backup withholding also triggers a filing requirement regardless of amount.
- Electronic Payment Exclusions: Payments made via credit card, debit card, PayPal, Venmo, or gift cards are not reported on 1099-NEC or 1099-MISC. These payments are reported separately on Form 1099-K by payment processors. QuickBooks automatically excludes them.
- Mandatory E-Filing Rule: If you file 10 or more combined federal forms (including 1099s and W-2s), the IRS requires electronic filing.
Step 1: Create Your 1099s in QuickBooks Online
QuickBooks Online offers two ways to prepare 1099 forms: automatic preparation or guided manual setup.
Option 1: Let QuickBooks Prepare Your 1099s Automatically
This option is ideal if your accounts and vendors are already set up correctly.
A. Access the 1099 Center
- Go to All Apps
- Select Expenses & Bills
- Choose 1099s
- Click Prepare 1099s
- Select Let QuickBooks do it
B. Review Company Information
Confirm that your business name, address, email, and tax ID match IRS records. Correct details prevent filing delays or rejections.
C. Review Automatically Generated 1099 Forms
QuickBooks analyzes your chart of accounts to identify service-related expenses and vendors paid during the year. It automatically excludes:
- Payments below the $600 threshold
- Credit card and third-party payments
- Payments to corporations
- Reimbursements (in most cases)
- Non-U.S. contractors
D. Review Contractor Payment Details
For each contractor, you can:
- View payment breakdowns
- See included and excluded amounts
- Update account-to-box mappings for 1099-NEC or 1099-MISC
Once reviewed, confirm you’re ready to file.
Option 2: Prepare 1099s with QuickBooks’ Guided Help
This option gives you more control and is ideal if your setup needs adjustments.
A. Start Manual 1099 Preparation
- Go to All Apps
- Select Payroll
- Choose Contractors
- Click Prepare 1099s
- Select I’ll do it myself
B. Confirm Business Information
Verify your company details and confirm accuracy before proceeding.
C. Select Accounts and Map 1099 Boxes
Choose the expense accounts used for contractor payments and assign the appropriate 1099 boxes. Most businesses use Box 1: Nonemployee Compensation (1099-NEC), but consult your accountant if unsure.
D. Review Contractors and Payment Totals
- Mark contractors who should receive a 1099
- Add missing contractors from the untracked list
- Verify contact details and email addresses
- Review reportable totals
You can also preview individual 1099 forms before moving forward.
E. Choose Filing Method
Decide whether to:
- E-file your 1099s through QuickBooks, or
- Print and mail forms yourself (paper filing limits apply)
Also See: How to Fix QuickBooks 1099 Forms Not Printing Correctly?
Filing 1099s Using QuickBooks Online Accountant
For accounting professionals, QuickBooks Online Accountant offers automated 1099 preparation across multiple clients.
Key features include:
- Centralized 1099 dashboard
- Real-time filing status tracking
- Bulk downloads of completed forms
- Easy W-9 management
- Client-level and firm-level filing controls
This option is especially useful during peak tax season.
Step 2: E-File 1099s in QuickBooks
Once your forms are prepared and reviewed:
- Select the e-file option in QuickBooks
- Verify federal and applicable state forms
- Choose contractor delivery methods (email or mail)
- Enter billing details if prompted
Important: Copy A of Form 1099 is for your records only and should not be mailed to the IRS.
Step 3: Track Your 1099 Filing Status
After submission, QuickBooks notifies you by email and updates your filing status in the system.
A. Check Filing Status in QuickBooks
- Go to Taxes
- Select 1099 Filings
- View the current filing status
- Download PDF copies as needed
B. Understanding Filing Statuses
- Not Submitted: You haven’t e-filed yet
- Submitted: The IRS has received your forms
- Received by IRS: The IRS is processing or has accepted your filing
IRS confirmation typically arrives within a week but may take longer during peak filing periods.
Final Thoughts
Creating and filing 1099 forms with QuickBooks Online is one of the easiest ways to stay compliant, reduce errors, and save time. With built-in automation, guided workflows, and real-time tracking, QuickBooks empowers businesses and accountants alike to handle 1099 reporting efficiently.
If you work with contractors regularly, setting up your accounts correctly throughout the year will make tax season smooth and stress-free. For complex situations, always consult a qualified accountant or tax professional.
By leveraging QuickBooks Online’s 1099 tools, you can focus less on paperwork and more on growing your business.
Frequently Asked Questions
QuickBooks Online can automatically help prepare your 1099-NEC and 1099-MISC forms by scanning your contractor and vendor payments and identifying those that meet IRS criteria. You can then review and e-file them through the platform.
The cost to e-file 1099 forms through QuickBooks may vary based on your subscription and filing method. Some plans include unlimited e-filing (e.g., QuickBooks Contractor Payments or QuickBooks Payroll), while others may charge fees per form. Third-party sources note that standalone e-file fees historically have started around $14.99 for a few forms with additional fees per form.
QuickBooks uses the vendor name you enter in the system when generating 1099 forms. While you can include a company name in the vendor details, the actual 1099 will reflect the vendor name field.
Yes. QuickBooks Online simplifies 1099 management by automatically identifying eligible contractors, excluding non-reportable payments (like credit card or PayPal payments), and offering e-file options directly through the platform. This reduces manual work and helps you stay compliant with IRS requirements.
To e-file from QuickBooks Desktop, you typically prepare the 1099 forms in QuickBooks, then export them to a service like Tax1099.com for e-filing. After exporting and configuring vendors and states, you can submit them electronically to the IRS through that service.
Yes. In QuickBooks Online, go to All Apps > Expenses & Bills > 1099s, then select View 1099 to see archived or previously filed forms. If a form isn’t listed, QuickBooks support can help you obtain a copy.
State filing requirements vary. QuickBooks’ 1099 e-file service supports federal and some state filings, but not all states participate. You should verify your state’s requirements and check QuickBooks documentation to see if your state is supported.
