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SAustin11
October 5, 2022
Question

Excludable Payments from 1099

  • October 5, 2022
  • 2 replies
  • 0 views

Years ago, I remember seeing a list of terms for entering in the Check Number box, so the payments would not come up on the 1099 Detail report.

 

For instance, using CC for credit card, or DBT or Debit for debit card payments.

 

I've looked everywhere and can't find it.  Does Quickbooks have a list we can use?

Now, with Paypal, Venmo, etc., how does QB recognize the payments to not flow through to the 1099 Detail report?

    2 replies

    DivinaMercy_N
    DivinaMercy_N
    October 5, 2022

    Hello there, @SAustin11. I'm here to provide some information about those payments that are excluded from the 1099. 

     

    The site that you've previously seen might have been updated. You may check this article instead: Understand which payments are excluded from a 1099-NEC and 1099-MISC. This includes the list of payments that are excluded from the 1099 form.

     

    Then, you can also run the 1099 Summary report to verify excluded payments. To get started, please go to the Where can I find the payment information? section and select QuickBooks Desktop.

     

    Once everything is fine, here's an awesome resource that you can open to have a guide in preparing and filing 1099s in QuickBooks Desktop: Create and file 1099s with QuickBooks Desktop. 

     

    Keep me posted if you have any additional questions about the 1099 forms. I'm always here ready to lend a hand. Have a great day ahead. 

    S
    SAustin11Author
    October 5, 2022

    I know all of that.  If you'd read my initial question, that is NOT what I'm asking.  

     

      M
      Mich_S
      October 5, 2022

      I reviewed your initial questions from this post, @SAustin11. I'd like to share some thoughts about excluding payments from 1099.

       

      The option to use a list of terms to hide payments from the 1099 Detail report is currently unavailable in QuickBooks Desktop.

       

      Most excluded payments are identified by account type, such as credit card payments. Some can be identified by key terms such as "Debit," "Debitcard," "DBT," "DBT card," "DCard," "Debit CD," "Visa," "Mastercard," "MC," "MCard," "Chase," "Discover," "Diners," and "PayPal."

       

      Any payment made using a credit card, debit card, or third-party platform like PayPal, Venmo, etc is excluded from 1099. These transactions can be excluded by using the above keyword suggestions. By putting these codes or terms, it's simply telling QuickBooks that this isn't a check or a direct money transfer that's being paid with a card or some sort. In this case, QuickBooks is going to exclude them.

       

      Additionally, I suggest making sure that the account type for the transaction you want to hide is correctly mapped as Omit these payments from 1099. You can do that by simply going to Preferences. Here's how:

       

      1. Open the Edit menu.
      2. Click on Preferences and go to Tax: 1099.
      3. Go to the Company Preferences tab.
      4. Click on the Yes radio button.
      5. Select Click here under If you want to map your accounts to boxes on Form 1099-MISC.
      6. Choose Show all accounts from the drop-down.
      7. Omit all payments you want to exclude from the form.
      8. Lastly, click on Save and close.

       

      That should do it! I'll also attach these handy articles about handling 1099 in QuickBooks.

       

       

      Keep in touch so we can help you further about this matter or QuickBooks in particular. Have a good one!
       


       

        S
        SAustin11Author
        October 7, 2022

        Thank you.  I just tested some other payment types and unfortunately, they did show up on the 1099 Detail report - SQUARE and VENMO.

         

        As you said, PAYPAL works, but abbreviating it as PP does not.  Abbreviating credit card as CC, did not exclude the payment from the 1099 Detail report either, but labeling it as VISA did.

          BigRedConsulting
          BigRedConsulting
          October 7, 2022

          @SAustin11 

          From my past testing and a foggy memory of the details when a help system actually existed in QB, if you create a bank account called "PayPal" to record your PayPal activity, which is the best way in QB since PayPal functions like a bank account, it will be ignored. Same is true for all transactions in a Credit Card type account, regardless of the transaction document number.

           

          Yes, at the time Intuit came up with this list of things to ignore Square and Venmo didn't exist, and since Intuit hasn't updated the list in many years they're not ignored.

           

          Note that one way to minimize the pain of creating 1099's, or to eliminate it, is to avoid paying 1099 vendors with cash. If you consistently use one of the payment methods that is reported on the back end, then you won't have to file any 1099's - or very few, for select vendors that won't accept credit cards or PayPal/Venmo type payments.

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