1099’s and QuickBooks Online (QBO).  Pretty easy to use.  You can set up tracking the first time you pay your subcontractor . As you add the as a vendor, check track payments for and enter their Tax ID. For most independent contractors, this is probably their social security number. If you don’t do this at first, you can always go back and do it later.  The best method is to invite them in with the new worker tab in the QBO system.

Who should get a 1099?

Most people will send a 1099 to a vendor that fits the IRS definition of a subcontractor.    The guidelines from the pdf from the IRS site can be found here.  The general rule is that business owners must issue a Form 1099-MISC to each person to whom you have paid at least $600 in rents, services (including parts and materials), prizes and awards, or other income payments. You don’t need to issue 1099s for payment made for personal purposes.

When do I have to submit this form?

You can file an extension if you just cannot get them out in time.  Try to get them out by mail on or before January 31, 2018.  I prefer to use the 1099 electronic system with QBO.  If you watch Mariette’s step-by-step  video that I shared on my Facebook page, you will see the steps to produce one.   It is important to have all the information on the vendor BEFORE you pay them.   I am hopeful that once the worker’s section in QBO gets going, it will be storing the subcontractor data in the system.  So if the contractor already filled in their Social Security  or FEIN number, it will be there for you.

Correct Beginning Balance:  Manually undo a bank reconciliation

If it is just a complete mess, see this other post in regard to manually undoing a bank reconciliation.  Sometimes, you just have to go back.  If you know a ProAdvisor or CPA that has QuickBooks Online Accountant version, we can easily undo a bank reconciliation for you in a matter of seconds. You can always reach out to me and for a minimal charge, I can do that for you.   It does require you to give the person an accountant user permission.  I would do this via a shared screen so that you are absolutely sure this is what you want to do.  There are plenty of warnings in the system and it does give you the beginning balance before you undo it.  And perhaps, I could help you discover the problem without having to undo things.  It is a service we provide here at Artesani Bookkeeping.

Last piece of advice: Take a break

If you find you are at wits end trying to reconcile.  You have checked everything and cannot figure out what is wrong, walk away from it.  Just for one day.  I cannot tell you how many times in my career, I have done this.  After awhile, tired eyes and a tired brain just need a break.  The next day, fresh eyes can see so much more.

If you have any questions or would like to see a future video on another topic, please reach out to me on Facebook.