Setting up 1099 vendors in QuickBooks correctly can save you a lot of stress during tax season. When vendors aren’t set up properly, QuickBooks may show missing amounts, incorrect totals, or vendors not appearing at all when it’s time to file your 1099s.
This guide walks you through the entire process in plain language, so you can confidently set up 1099 vendors in QuickBooks Online or QuickBooks Desktop—even if you’re doing it for the first time.
What Is a 1099 Vendor?
A 1099 vendor is typically a freelancer, independent contractor, or service provider you pay for work—but who is not your employee.
In most cases, you must issue a Form 1099-NEC if:
- You paid a vendor $600 or more during the year
- Payments were for services, not products
- The vendor is not on payroll
QuickBooks tracks these payments and helps prepare the 1099 forms—but only if vendors are set up correctly.
Before You Start: What You’ll Need
To avoid problems later, gather this information first:
- Vendor’s legal name
- Current mailing address
- Tax ID (SSN or EIN)
- Payments made by check, ACH, or cash
Tip: Always request a W-9 form from your vendors before paying them.
How to Set Up 1099 Vendors in QuickBooks Online
Step 1: Turn On 1099 Tracking
- Click Settings ⚙️
- Choose Expenses
- Select 1099 filings
- Turn on Track payments for 1099
- Save your changes
Step 2: Add or Edit a Vendor
- Go to Expenses → Vendors
- Click New Vendor (or open an existing one)
- Enter the vendor’s name, address, and email
Step 3: Mark the Vendor as 1099-Eligible
- Open the vendor profile
- Click Tax settings
- Check Track payments for 1099
- Enter the Tax Identification Number
- Save
Step 4: Map Your Expense Accounts
1. Go to Taxes → 1099
2. Click Prepare 1099s
3. Select the correct 1099-NEC box
4. Map expense accounts like:
- Contractor Expense
- Professional Fees
- Outside Services
This step is critical—payments won’t show on 1099s if accounts aren’t mapped.
Step 5: Review Payment Totals
QuickBooks will now calculate totals for each vendor.
Review them carefully before filing.
How to Set Up 1099 Vendors in QuickBooks Desktop
Step 1: Turn On 1099 Preferences
- Go to Edit → Preferences
- Select Tax: 1099
- Open Company Preferences
- Turn on 1099 tracking
- Choose 1099-NEC
Step 2: Make the Vendor 1099-Eligible
- Open Vendor Center
- Double-click the vendor name
- Go to Additional Info
- Check Vendor eligible for 1099
- Enter the Tax ID
- Save
Step 3: Map Accounts to 1099 Boxes
- Go to Vendors → Print/E-File 1099s
- Select 1099 Options
- Map the correct expense accounts
- Review thresholds and continue
Step 4: Confirm Payment Methods
Only these payment types count for 1099s:
Only these payment types count for 1099s:
✔ Checks
✔ Direct deposit
✔ Cash
Credit cards and third-party processors are excluded by IRS rules.
Common 1099 Setup Problems (and Easy Fixes)
Vendor Not Showing on 1099
- 1099 tracking not enabled
- Vendor not marked as eligible
- Expense account not mapped
Amounts Look Incorrect
- Payments posted to wrong accounts
- Credit card payments included
- Wrong date range selected
Invalid or Missing Tax ID
- Extra spaces or dashes in TIN
- Legal name doesn’t match IRS records
Best Tips to Avoid 1099 Issues
✔ Set up vendors before paying them
✔ Use consistent expense accounts
✔ Review totals monthly—not just in January
✔ Run a 1099 preview before filing
✔ Don’t wait until the deadline
Need Help with 1099 Setup in QuickBooks?
If your 1099 vendors are missing, totals don’t match, or QuickBooks keeps showing errors, professional help can save you time and penalties.
📞 Call 888-463-3385 to speak with a QuickBooks 1099 forms expert
🕒 Support available 24/7
Frequently Asked Questions
Do credit card payments count for 1099s?
No. The IRS excludes credit card and third-party processor payments.
Can I set up 1099 vendors after paying them?
Yes. QuickBooks will recalculate eligible payments automatically.
Which QuickBooks version supports 1099s?
QuickBooks Online and QuickBooks Desktop both support 1099-NEC filing.