January 7, 2025 • 66 mins
Nancy McClelland and Rich Kane join us to chat about ways to make 1099s a part of your monthly client services using Keeper.
QB Power Hour is a free, biweekly webinar series for accountants, ProAdvisors, CPAs, bookkeepers and QuickBooks consultants presented by Michelle Long, CPA and Dan DeLong who are very passionate about the industry, QuickBooks and apps that integrate with QuickBooks.
Watch or listen to all of the QB Power Hours at https://www.qbpowerhour.com/blog
Register for upcoming webinars at https://www.qbpowerhour.com/
00:00 Introduction and CPE Credit Instructions
01:09 Welcome to 2025 Power Hour
01:56 Meet the Panelists
06:56 CPE Credit Details and Housekeeping
10:28 1099s: An Overview
18:53 1099 NEC and MISC Fundamentals
30:29 1099 Reporting and Payment Methods
33:41 1099K and Reconciliation Challenges
34:42 Extension Options for 1099 Filing
35:47 Meeting the NEC Deadline
37:25 Handling Multiple 1099 NECs
41:10 Excluding Payment Methods for 1099
52:39 IRS 1099 Matching and Notices
55:07 Effective Workflow Habits for 1099 Season
01:04:29 Closing Remarks and Resources
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dan DeLong (00:30):
Welcome everybody to 2025.
Another great, great day to bealive, to be alive when you
consider the alternative.
So we have a star studded, castwith us here, joining us here
(00:50):
today for for our first newpower hour of 2025.
I got.
1099 problems, but a workflowain't one.
So we'll go around the go aroundthe horn here, introduce
everyone.
And we'll kick it off causewe've got a lot of.
Stuff to cover and a short timeto get there.
(01:11):
So this is like the smoking, thebandit version of QB power hour
today.
my name is Dan DeLong owner ofDanwidth and school bookkeeping
worked at Intuit for nearly 18years.
Co hosting today, as well as theworkshop Wednesday over at
school bookkeeping, doing otherthings as well.
So spot.
Matthew Fulton (01:33):
Matthew Fulton here.
My friends call my spot.
I am the co creator of QBcommunity, live Facebook group,
founder of Parkway businesssolutions, and happy to be here
with all these amazing people totalk about all our 10 99
problems.
Nancy McClelland (01:48):
Hi everyone.
I'm Nancy McClelland.
Most of you know me as thedancing accountant, and I'm so
excited to be here today is myfirst QB power hour on this side
of the camera, and I'm reallygeeked about that.
I have run my own CPA firm forthe past 23 years, a hyper local
firm in Chicago, Illinois.
Have an award winning blog andan MSN column.
(02:10):
I'll actually be sharing an MSNarticle that I wrote on 1099s
for you to make your life alittle bit easier.
And my big passion project isthat I run ask a CPA, which is a
membership community forbookkeepers who want to ask a
CPA questions that they can'tfor whatever reason, ask their
own clients tax repair.
And yeah, I'm a dancer too.
Dan DeLong (02:33):
So I need, I do need to ask you which came first,
this is a chicken or the egg,dancing or accounting or, Oh,
definitely
Nancy McClelland (02:41):
accounting.
I, actually didn't become adancer until 12 years ago.
It was yeah.
Yeah.
As a matter of fact, my companyused to be named Nancy
McClelland LLC, which was justriveting, exciting name that
really says so much about me.
And a client who saw me at adance performance at a pro bono
(03:05):
client of mine, a park in ourneighborhood.
I was in my full go 1960s goregalia and I walked up and saw
her there with her kidspicnicking and she said, look
kids, it's the dancingaccountant.
Dan DeLong (03:19):
And then it's stuck,
Nancy McClelland (03:20):
right?
Dan DeLong (03:22):
I actually was a dance mom, raising the kids,
Nancy McClelland (03:27):
oh my gosh, I had no idea.
We got so much to talk about.
Dan DeLong (03:30):
Yeah We don't want to, we don't want to take that
time now.
We'll do that offline because wegot to talk about Rich.
Rich, the dueling CPAs todayNancy and Rich are going to be.
Rich Kane (03:43):
And we're both dueling from, based in Chicago.
We've got good representationhere.
Now, I'm not like Matt.
I don't want to go by a nicknamebecause my nickname would be
Dick and it's got very negativeconnotations.
So we're not going to go thatroute.
I'm a CPA, I'm a long term proadvisor and I've been, we're
(04:06):
going to offer some wonderful1099 tips for everybody and try
and make it humorous and funnyand enjoy this wonderful topic.
Dan DeLong (04:17):
And, I got to say Rich was one of my favorite
customers when I worked atIntuit to talk to, right?
He was always very.
What's the best way to describeit?
He was always very gracious,even when because when you have
a problem with QuickBooks, it'semotional, right?
(04:40):
The last thing you want to dowhen When you're working inside
of a tool, whatever it is, havean obstacle to the, to that
solution, whatever it is thatyou're trying to do it.
If you're trying to do 10 99sand there's a, there's an error,
as we see in the Facebook group,known issues, as they, come up
(05:01):
we call them undocumentedprogram features.
He was, a great, one of thegreatest people to talk to
because he understood that Thepeople on the phone were
typically just the messenger andhe never took it out on the
messenger.
So even, when there was aproblem, he was very gracious to
(05:22):
that.
And I always loved to, See hisname pop up on the screen pop.
Okay, this is going to be agreat conversation.
I'm not going to
Nancy McClelland (05:29):
notice that Dan cannot say any of those
things about me.
So and then that's, absolutelytrue.
I am not that person.
So bless your heart, rich.
Somebody has to be the good guy.
Good cop, bad cop, right?
Matthew Fulton (05:42):
And I'm also hearing there is ways to flag
people behind the scenes as goodperson to talk to and not a good
person to talk.
I always felt it had beenflagged that way.
But anyways,
Dan DeLong (05:51):
there was there was a guy that worked there and you
probably have talked to him Richand Nancy Tony Calabrese.
He ended every, call that said,you're my favorite pro advisor
says right here on my nose.
Great guy.
(06:12):
But a little bit about the QBPower Hour it's every other
Tuesday at 12 noon Eastern.
The upcoming webinars, as yousaw from the, little intro, we
are now doing CPE credit withit's the earmark app.
We will have poll questions andthings like that, but that
doesn't count for attending thelive the live webinar like
(06:34):
today.
When you do live CPE credit wewill have poll questions, but
five to seven days after thelive webinar They will create a
course for you In the earmarkapp that you can go into take
those take that quiz And that'swhat gets you your CPE credit.
We won't be issuing CPE creditwith our friends at makers hub
(06:58):
that we're doing the live onesBut the good news is that every
Kibbe Power Hour will beeligible for CPE credit, just
not on the live one, it's goingto be in the five to seven days
after.
So once we have our channelestablished we will continue to
socialize that, so you canalways pop into the QB Power
(07:18):
Hour channel on EarMark, takeyour, quizzes after attending,
or you'll be able to replay ifyou forget what we talked about
I, have a goldfish brain forgetwhat I did just a second ago.
You can review it, take thequiz, get your CPE credit
(07:39):
through, earmark if you do needthe slides, the recordings, the
podcast those types of things,you can always go to
qppowerhour.
com to watch resources, and I dobelieve we are socializing the
handout, no, I am doing it hereon the, stream but the link for
(07:59):
the handout for today, we'll putthose in the chat.
So I already talked about theCPE sessions.
If you want to do the QR code toget the, app, there is a free
option.
Nancy you, do yourself on yourmark as well for free.
You can do one CPE a month orsomething like that.
(08:21):
If you do know about.
Yeah, I don't know.
I don't
Nancy McClelland (08:24):
remember the specific.
I don't remember the specificrules because I think that what
they do is so amazing thatpaying for it is just, it's like
right tool, which, oh, by theway, I'm representing today,
right tool.
There are certain, things outthere where I'm just like,
they're doing such great thingsthat I will use the paid
subscription just because I wantto thank them.
(08:44):
I just want them to continue toexist.
But I do believe that you canget it.
Between one and three CPE permonth for free through earmark.
You do have to sign up for anaccount, but they have unpaid,
versions of it.
Yeah.
Dan DeLong (08:59):
All right.
And a little bit ofhousekeeping.
So if you have specificquestions about 10 99s, we put
them in the Q and a, because itmakes it a lot easier to see
those as, we're scrolling bybecause if you put just stuff in
the, comments, in the chat thatwill, quickly, scroll by and if
we're not catching it.
(09:20):
We don't see it.
So if you have specificquestions for the topics that
we're talking about today,please put them in the Q& A.
We have just general things tosay.
Please put them in the chat, inthe comments.
And we have the, handoutsavailable on the slides.
We also do have the QB PowerHour store.
If you want to check out someflag there about the QB Power
Hour.
(09:41):
Always can do that.
So what's on the agenda today?
we'll be talking about.
In general 1099s reallyshouldn't be this hard and I was
talking to Nancy before beforethe webinar that it was super
easy not, too long ago.
It was really just, there wasone form that QuickBooks did.
(10:02):
There was a sweet
Nancy McClelland (10:03):
spot.
Yeah, there was this, it wasreally hard years ago when you
had to do everything.
manually and you had to run tothe post office right before
midnight on the day that theywere due to the IRS, right?
That was awful.
And now things are terriblebecause there's so many
different payment methods andeverything's so confusing, but
there was this amazing sweetspot that lasted for I don't
(10:25):
know, I feel like seven years orsomething where it, it wasn't
miserable, but it is.
I don't know.
The envelope, trying to find theenvelopes.
Oh, gosh.
Oh, those perforations.
Oh, gosh.
Yeah, no.
From when they started.
Three
Dan DeLong (10:40):
forms a page or four forms a page or whatever.
Yeah.
Nancy McClelland (10:45):
Oh, God.
And when the windows didn't lineup.
Yeah.
Those were the really awfuldays.
What we have today is at leastbetter than that, but it's worse
in different ways.
I don't know if you saw that Istuck that into this slide.
You just had the 1099s shouldnot be this hard and I'm the one
that put, but they are, I snuckthat in there.
Dan DeLong (11:02):
Always appreciate your your color commentary.
All right, but we'll with Richand we'll be going through the
1099s and W9s fundamentalsbecause it's always good to
reframe or rebase yourself, on,What am I, in for this, season?
(11:23):
Is there any new changes, thosetypes of things, and then how to
streamline that process and thenwe'll have some Q and a, as we
go through a session here today,we'll start our first polling
question is a two parter.
Do you assist your clients?
I got to hit the launch button.
Do you assist your clients inpreparing 10 99s?
(11:45):
And if so, what do you use tohelp prepare them?
And I don't know, did Spot, wereyou able to put the link for the
handouts in the You know what?
I didn't get that one.
Matthew Fulton (12:03):
I'll, get on that right away.
Just one second.
Nancy McClelland (12:07):
So while this is up I see it says hosts and
panelists cannot vote and I'mreally bummed about that because
I love, polls.
But it's interesting becausethat second one says, what do
you use to help you prepare andfile them?
And one of the options iskeeper, which is what we use
and, love.
And I'll be speaking to that alittle bit.
(12:27):
Okay.
Later, but I want to clarify foranybody who is confused about
that answer.
You don't actually file 1099through Keeper.
You use Keeper to assist you.
It gives you a report of what1099s you should be filing and
the information you would needfor it.
It does sync with QBO.
And then from there.
You could either use QBO toprepare them.
(12:50):
You could.
There's an export for tax 1099and there's an export for track
1099, which is what we use.
So I just wanted to clarifythat.
Dan DeLong (13:03):
All right, I'm sending Kathy the slides and now
everybody should be able to seewhich
Nancy McClelland (13:08):
is similar.
I'm going to respond to whatRoberta is saying that they use
both QBO and tax 1099.
Again, a lot of these, you canuse QBO and file them through
QBO.
You can use, QBO and file themthrough tax 1099 or track 1099.
You can use keeper, which syncswith QB.
There's so many options, whichis why they're hard, right?
(13:30):
When you.
Dan DeLong (13:32):
And there's so many different iterations of
different companies and they allhave a similar website, right?
Is it track 10 99 com or tennine com or 99 tracking.
I don't even know if thatexists, but it, there's
somewhere it can be
Nancy McClelland (13:53):
confusing it.
Dan DeLong (13:54):
Yeah.
Yeah.
It, you could definitely confusewhich service it is because the,
names are so, similar.
I just dropped
Nancy McClelland (14:04):
a link to the Keeper Prepare 1099's help
center in in the zoom chat, spotwhen you have a second, no
hurry, if you can make sure toshare those to the other socials
because actually their helpsection is, really comprehensive
and lovely.
So really helpful.
Dan DeLong (14:23):
Go ahead and launch the share the results here.
So definitely 89 percent of thefolks on the call here in the
zoom answered that they doassist.
So I appreciate you taking anhour out of your day to attend
this in the midst of helpingyour, client prepare 1099.
(14:44):
But, we typically do things whenwe have to.
So those deadlines are fastassuming.
Yeah, 1099s really shouldn't bethis hard like determining and
tracking which 1099s, whichclients want the 1099s prepping,
(15:05):
identifying 1099 eligiblevendors, determining vendor
entity types, because that's aOkay.
That's something to considerdefining what constitutes a
service, determining who paidfor the service, reimbursement,
calculating 1099 eligible yearto date spending, dealing with
(15:26):
vendors who refuse to fill outthat W 9, never happened,
missing a 1099 vendor because itwas an unusual account, waiting
until the year end to identifyall those vendors and collect
those 1099s,
Rich Kane (15:42):
We're tracking it all in a CSV.
Dan DeLong (15:46):
Thoughts about this, Nancy if you're in your opinion,
Nancy McClelland (15:52):
it doesn't have to be this way.
It doesn't have to be this way.
Dan DeLong (15:57):
I'd like to ask Dwight.
Is that Dwight with the firefrom the officer?
Matthew Fulton (16:03):
Yeah.
And an ostrich it looks likealso.
Question for people real quicklyin the chat that are watching
this.
What month do you guys startthis whole process of 1099 ing?
We'd love to hear when everybodygets started each time.
Nancy McClelland (16:19):
And actually, while people are thinking about
that I, want to mentionsomething far before we started
using Keeper, we transitioned tomaking 1099 part of our year
long year round workflow.
And I feel like no matter, it'snot the technology is an
important piece of this puzzle.
The fundamentals that Rich isgoing to go over are an
(16:41):
important piece of this puzzle.
But, if.
Your first as you're closingJanuary, you're identifying
potential 1099 vendors andcollecting W 9s at that point
And you're tracking themthroughout the year.
Keeper makes that very easy Buta couple of years before we
started using Keeper We you knowcame up with some reports in QBO
(17:04):
that our team was reviewingevery single month as part of
the monthly close and thatChanged our lives completely.
So I would say if you take onepiece of information away from
this It's your biggest.
Your biggest bang for your buckis to start making this i'm
seeing a lot of people sayingdecember Somebody said tomorrow
(17:25):
which is cracking me up.
If you're starting tomorrow for2025, 10 a nine preparation,
then that's awesome.
Matthew Fulton (17:40):
They'll still get done.
We've got what 24 days, 23 days.
Sorry, not including it'sactually less than that,
depending on the app, but I'msure you guys will talk about
that.
Dan DeLong (17:51):
Yeah.
So let's, speaking of thefundamentals, let's turn it over
to rich here and talk aboutthese 10 99 fundamental.
So I'm going to be driving theslides, right?
So whenever you say.
Rich Kane (18:05):
People
Dan DeLong (18:05):
Ask to the next slide.
Rich Kane (18:07):
Let's take it to the basic fundamental.
What is a 1099?
And the best way I can describeit.
You are tattling to the IRS thatsomebody you paid somebody some
money.
That's probably the best way Icould tell it.
It's an infant.
It is.
It's an informational return.
You're letting the IRS know thatsomebody you paid somebody some
(18:30):
funds and they We'll put it intotheir system and their
expectations are is they willsee it on the recipients.
Tax return.
That's the fundamentals of it.
So it's how do we get theinformation?
How do we tattle correctly?
And you're going to get allkinds of variations in there but
(18:53):
the first thing that I tell myclients if it's an individual in
LLC Corporations do not get oneS corps don't get one but
attorneys do for some reasonthey have singled out attorneys
And we're going to talk about, I
Nancy McClelland (19:12):
said,
Rich Kane (19:14):
the next one is going to become as accountants.
And so far we haven't, but, it'sfunny you, in that last slide,
you said when do we get theinformation?
We're always begging our clientsin January.
Who was this person?
Can you get their address?
Can you get their tax id number?
Oh, they're from anothercountry.
(19:34):
They're gone.
I can't find them So there issome ramifications if you get
audited and they find that youdidn't declare it on the
Positive side, get the tax IDnumber before you write the
first check or the first paymentyou make.
At least you have their tax IDnumber.
(19:55):
Is it 100 percent correctsometimes?
No, but at least we've got somenumber that we can say that
we've at least tried to get it.
Now, as you look here on thescreen, there's all these
variations of tattling to theIRS and you can see, and what
they do is they put it on yourrecord in your transcript.
(20:16):
They're going to be expecting tosee it somewhere in your tax
return.
So if you'd want to blow it off,the IRS will know.
Now the rules are 600 for anNEC.
And I hate acronyms.
So NEC stands for non employeecompensation.
That's one of the most commonones that people, outside
(20:39):
contractors, they dread.
They don't want the IRS to knowbecause they don't want to have
to report it.
Sorry.
You get all these variations ofit.
However, if the client wants todeduct that expense on their
return, they need to give them a1099.
Now, some I guess I get isoffice cleaning.
(21:01):
The people come and they do theoffice cleaning.
So you pop them you give themcash out of the petty cash fund.
Technically you're using that asan expense.
You do need to get theiraddress, their tax ID and issue
the 1099.
Anyone that's made over 600 willgo on to the NEC, and the other
(21:22):
common one that we see is themiscellaneous ones.
And really the differencebetween the NEC and the
miscellaneous ones is if you'reon an NEC, you must also pay
self employment tax on thoseamounts in that 1099.
That's Social Security andMedicare.
(21:43):
If it's on a miscellaneous form,you do not need to pay the self
employment tax.
So Dan can, advance to the nextslide.
Can
Nancy McClelland (21:53):
I'm sorry, tax preparer here, I, would not,
say, if it's on an M, if it's onan MISC, you do not need to pay
self employment tax.
I would say it's a lot less tax.
Likely, but there are definitelyinstances where you might, for
example, receive royalties.
And if you receive royalties forintellectual property that
(22:15):
you've created, for example,you're an author and you're
receiving royalty and you fileit as Schedule C, that would go
on your tax return.
So I just got a thing.
Rich Kane (22:23):
I'll give you that one.
Nancy McClelland (22:24):
Okay.
I appreciate it.
Dan DeLong (22:26):
Okay.
What I'm hearing is never alwaysis not a thing.
With taxes.
Nancy McClelland (22:34):
With taxes.
The answer is always it depends.
Yeah, always it depends.
Now the screen you're looking atright now, I'm sure all of you
on this call are familiar withform W 9 but do you see that
little thing that's popped outin the chat?
The lower right hand cornerthere.
Those are a couple of thescreens from within Keeper that
(22:58):
is, I'm not going to go throughfull demo or anything like that,
but when we're in Keeper, we geta notification that says, Hey,
you have added new vendors sincelast month's clothes.
Please take a look.
Some of these might be potential1099 vendors.
They might not have gone pastthat.
(23:19):
They might be a corporation whoknows?
They're just saying, Hey, maybe,and you go and you take a look.
And if you need to request ifit's AT& T, you say, no, they're
a corporation.
I don't need this.
Don't ever remind me about themagain.
But if it's somebody that youneed to request a W 9 for, you
can actually do that.
From within the system, what aslong as you obtain the vendor's
(23:43):
email address from your client,you can then request it from
within Keeper and they can fillit out.
The vendor can fill it out andright there.
It's an electronic thing and itwill create a full W 9.
They sign it and everything andit syncs up.
to QBO.
So even if you don't use theexport from Keeper to prepare
(24:07):
your 1099s, this is just areally nice way to get those W9s
and get them attached to thevendor record in QBO.
Dan DeLong (24:16):
And there was a question,
Matthew Fulton (24:20):
go for it Dan, I think we're doing the same
thing,
Dan DeLong (24:22):
sorry.
Kathy asked if you could clarifycorporations no for C corp, yes
for S corp, or?
No,
Nancy McClelland (24:31):
no, corporation.
And then what about LLC
Dan DeLong (24:33):
that isn't S corp or partnership?
Nancy McClelland (24:35):
So no corporation of any kind, and
that would mean C Corp, it wouldmean S Corp, it would mean non
profit, it would meancooperative, it would mean,
housing association in moststates.
Anything that is, was formed asa corporation or, to the other
(24:55):
point that she made, has acorporate election.
So if you are, as we are, asingle member LLC, and we have
made an election through Form2553 to be treated as an S corp.
We are a corporation for thesepurposes.
So anyone who is a corporationof any kind or who has elected
(25:16):
corporate tax treatment.
Thank you for clarifying that
Dan DeLong (25:19):
with the exception of attorneys
Nancy McClelland (25:21):
because they can't be trusted.
Dan DeLong (25:28):
Okay, so rich.
Okay, bring us back to thisform.
Any C.
Here's your NEC
Rich Kane (25:34):
non employee compensation, box number one.
That's the amount of servicesthat you have rendered.
Now this is supposed to be justfor services.
Now if you paid somebody some,reimbursed them back for
expenses, generally you're ableto, in your accounting software,
you're able to say, officesupplies or supplies is not
(25:58):
going to go on to the 1099 form.
It's only supposed to be forservices, not for any other in
what I call incidentals.
Also on here in box one is whereyou would put attorney's fees,
For doing normal legal work, sothey, you have an attorney, he
(26:20):
reviews a contract, he does anemployment agreement, he
reviews, some documents you havein his normal everyday, of
course, of doing legal work.
Legal work that goes in boxnumber one.
Now if you're paying an attorneyto settle a case for you, one of
(26:44):
those attorneys that work onpersonal injury and you're
paying the attorney to thesettle a case.
That will not go on the NECform.
That will go on themiscellaneous form.
Nancy McClelland (26:57):
And if I can clarify, if you're paying the
attorney, you're going to wantto use the NEC.
If the attorney is receivingsettle settlement from the case,
so like maybe the court gave youthe money.
And you are paying it normallythe court will pay the attorney
directly and you won't have toworry about this but every once
in a while, you'll receive thesettlement funds and you need to
(27:18):
pay the attorney their portionof it.
That's what rich is referring tohere so very unusual situation.
Rich Kane (27:25):
But
Dan DeLong (27:26):
it happens.
Rich Kane (27:27):
MISC form.
Now the MISC form that's by,let's see, I'm trying to see
here where it says the legalfee.
Box 10, gross proceeds paid toan attorney is what we were just
talking about.
In box one, if you pay rent andyou have a landlord and you're
paying the rent to a,corporation here, I believe all
(27:51):
rents you're saying nocorporations for rents.
Nancy McClelland (27:54):
Nope.
No corporations.
Don't have to worry about it.
So if
Rich Kane (27:57):
you rent from an LLC or you rent from an individual,
you will need to get your rentin there and send them a 1099
form.
Nancy McClelland (28:09):
So this would be a situation where I would
request a W 9 because there area lot of folks who have LLCs and
there's just no way for you toknow whether they have a
corporate election or not.
But for rentals, most folkschoose not to be a corporation.
So I find that this is one ofthe biggest mistakes that people
make is that they're notreporting rents on the MISC.
(28:31):
It's, it happens a lot.
And also let's admit it.
Landlords hate to actuallydeclare everything that they
make, and they are some of thehardest ones to get the W 9s
from.
So I have a little trick that Iuse, which is I have language
that's actually saved internallyin our document that all of our
team members have access to.
(28:52):
And the language basically sayssomething like, Oh, I'm so
sorry.
I understand that you don't wantto file to prepare the W nine
for us.
But if you don't, we have tosubmit the 10 anyway, with the
box checked that you refused togive us your tax ID number.
And that usually triggers anaudit.
(29:13):
And none of us want that.
Rich Kane (29:15):
Correct.
Dan DeLong (29:18):
Couple questions.
Do you report retainers paid toattorneys or does that go?
Rich Kane (29:31):
Yeah, normal course of business with an attorney
goes on.
Nancy McClelland (29:34):
Oh, actually, I'm just now realizing what that
question really is.
You're saying is this cash oraccrual, right?
Because the retainer wouldnormally be sitting on your
balance sheet in prepaid expensebecause it hasn't been used up
yet.
Yes, because all 1099 forms arecash.
Basis.
So if you paid it to them, samewith prepaid rent.
If you paid it to them, it goeson the 1099 regardless of
(29:57):
whether it has been earned bythem or not.
I'm thank you for that's a greatquestion.
Dan DeLong (30:03):
Yeah.
So when is it not needed?
Nancy McClelland (30:07):
So this is one that I, love this question
because this is where1099problems.
io, which is one of my favoritewebsites this time of year
Jennifer Diamond, who I think Isaw pop up a couple of times in
the zoom chat.
She has gone so far into theweeds on this question that
(30:28):
occasionally I joke that it'shard to find her.
Because she just lives in theweeds of the payment methods
question and this is this is Themain point that she tries to
make, which is instead ofdeciding when you've got a
payment method where NEC isneeded, think of it as the other
(30:51):
way around.
If the payment is reportable onForm 1099 K, which means a
merchant services company, likecredit and debit card company,
or anybody doing third partyelectronic payments, Some forms
of Venmo, some forms of PayPal,etc.
and so on.
If they are reporting thosereceipts on Form 1099 K for
(31:16):
these services that arerendered, then It is something
that you do not have to use NECto report.
And so if you look at it, forme, that was like a game
changing perspective.
Instead of being like whatcounts for NEC?
What kind of payment methodscount for NEC?
Find out if 1099 K is beingissued by whatever platform
(31:36):
you're using.
And if so, you're off the hookfor the NEC.
Dan DeLong (31:42):
Yeah, we'll talk about what gets excluded and how
QuickBooks determines that.
Hopefully if we have enoughtime.
Time here.
So let's continue on herebecause this 1099 K is
relatively new to the whole 1099shenanigans, and I think that's
what that's maybe a triggerevent that started to make this
(32:05):
more harder for people who arepreparing them is the excluding
those certain types of paymentsbecause now 1099s are created by
somebody else For something thatyou used to, provide,
Rich Kane (32:22):
remember is you only want to be tattled on once.
You just if you, if it's the1099 cave, because it's a, you
use a credit card or a paymentplatform.
If it's on the 1099 K, and you.
Don't remember that or you don'tthink and you put it on an NEC,
(32:43):
it's going to get into the IRStwo times and they're going to
be expecting both of those.
So be careful.
So you only get tattled on onceand you only have to be
concerned one time rather thantwo.
Nancy McClelland (32:57):
Something I want to briefly mention about
the 1099k is that you do you,you are going to have to deal
with this as bookkeepers.
You're going to have to dealwith this on the other side of
it as well, because your clientsare going to be receiving 1099k
and there can be a lot ofchallenges.
With reconciling that 1099 Kagainst the revenue line on your
(33:18):
profit and loss becauseeverything's included in 1099 K
all of the receipts.
So it's got things that tipspayable gift cards purchased,
but not used yet.
It's got one of the biggest onesis sales taxes go into that
total.
It's just, it's awful.
It's a really terrible,frustrating form.
(33:40):
Go ahead.
Rich Kane (33:42):
All correct.
Yeah.
Tips, restaurant tips go intothe 1099k.
You can't really tie out on yoursales because you're not
including those items.
It's just.
Very
Nancy McClelland (33:54):
controversial.
Lots of challenges there.
Rich Kane (33:56):
Yeah.
Okay.
Dan DeLong (33:58):
So if you're not getting to the deadline there is
an option to extend it.
You can file an extension formbecause you
Rich Kane (34:02):
haven't filed your 1099s.
So if my recollection It's my
Nancy McClelland (34:10):
understanding, Rich, that we, this is not
actually something that we'reable to do in most situations.
There are very specific 1099sthat this applies to.
And so I would be really carefulwith this form and look up
whether you actually qualify forthe extension or not.
It's not one of those thingslike tax returns where you get
(34:32):
an automatic, yay, you don'thave to have filed your 1099s
yet.
So I would, look closely at theinstructions for this form
before deciding that you don'tneed to worry about that January
31st deadline.
This is not as, this is not asall encompassing an extension as
most people might think.
I didn't see this in the slidesand, didn't catch it in time.
(34:54):
Sorry,
Dan DeLong (34:56):
audit the audit of the slides.
Rich Kane (34:58):
Yeah.
Dan DeLong (35:00):
All right.
Let's talk.
Yeah, talk about let's talkabout meeting that deadline.
So we don't have to worry aboutthe extension.
Rich Kane (35:11):
So the, NEC forms are due to the recipients must be
postmarked by January 31st,unless that's a Saturday or a
Sunday, then you get a littleboosting of a couple of extra
days.
But the 31st is the NEC ofJanuary, and you're supposed to
send that in.
(35:31):
And the reason for this is tocombat fraud.
The sooner that the IRS getsnotified of it.
The sooner that they can beaware of it, and it's not
lingering around.
The miscellaneous, they give youan extra month for till 228.
(35:52):
So that was the reasoning behindgetting that out.
And you're right, Nancy, severalyears ago, it was never this
hectic, it was always February.
Then they pushed in the Januarydate for the NECs, and we're
scrambling to get all this stuffout.
Nancy McClelland (36:05):
The deadline's actually the end of March if
you're e filing and most of usare required to e file because
our clients usually have morethan 10.
And if we as a firm are filingfor more than one client where
are usually required to e file.
And the deadline for MISC andmany of the others is actually
the end of March if you're efiling, the end of February if
(36:27):
you're paper filing.
But oof, that NEC date being the31st of January, that is where
everything changed.
That's when everything got somuch more stressful.
now I wanted to mention herethat you or your clients, and I
saw a couple of peoplementioning this in chat So we,
(36:48):
did address it on this slide.
You or your clients might end upin a situation how rich was
saying you only want to tattleonce.
So if you have payments going tocontractors through gusto, or I
believe this happens in payrollservice.
Payroll, yeah, that's what Gustois, a payroll service.
(37:10):
So yeah, I don't know about theother ones cause we only use
Gusto, but yeah.
So there are lots of differentservices that will prepare the,
they will pay your contractorsfor you electronically and they
will prepare that 1099 NEC forthem, but let's say that I pay
rich through Gusto and I paidhim however many 700 or
(37:32):
something, Gusto sends him a1099 NEC for seven hundred
dollars, but then I also paidhim directly from my bank
account, right?
I wrote him a check or I senthim a Zelle or something like
that.
In that situation, I would alsoyou can either take those things
and fill them in on your payrollcompany and say Oh, hey, wait
(37:55):
Make it for hire, but that's areal pain in the butt.
So I have confirmed that you canissue two 10 and nine NECs from
the same company.
You just don't want to duplicateany of that.
So if I paid him 700 throughgusto and I paid him 700.
With check, then I would issuehim another NEC from our company
(38:16):
as well, but I'm preparing itfor that 700 now.
A best practice is in our firm,we will often issue those even
if they're below the 600threshold because the whole NEC,
the amount issued by Gusto andthe amount issued by us exceeds
600.
I have not seen any IRS guidanceon that, but that's how we're
(38:38):
handling it as a best practice.
Rich Kane (38:41):
You don't have to issue it.
You can issue it for less than600.
Do you have an, I have one weget this poll question up and
that actually came from me.
I'd like to know how topronounce this particular
processing.
Dan DeLong (38:57):
There's three.
I did, add another option.
It's at Zelle like bell, Zellelike belly or zeal like wheel.
All
Rich Kane (39:09):
sorts of ways.
There was an instance that Iwould issue a 1099 for less than
600.
Let's say you had a contractorcome out and painted your place,
and he did a really, for 500,and he did a really crappy job,
and he won't come out, he won'tadjust it.
Boom, I'll cut the 1099 becausethen he's, I'm tattling on him
(39:30):
and he's got to cover it.
Another one that I less issuesfor less than 600 is how many of
us have had employees who askedfor a loan and they'd have that
loan and then they quit on youand you didn't get a chance to
recoup it.
We'll scroll.
Okay.
I'm now out the money per se.
So I'm going to issue the 1099.
At least they got to pay tax onit.
Nancy McClelland (39:51):
Yeah.
If they're an employee, I wouldhave run that.
I would run that through theirfinal paycheck.
As W2 percent.
Yeah.
Half
Rich Kane (39:59):
of them don't even remember it's on the books and
you get to the end of the year.
Oh, that person's no longer withus.
And if they're a great employee,we let it slide.
And if not it's just one way tozing it.
All right.
I don't think you're allowed
Nancy McClelland (40:12):
to choose on that one.
I'm pretty sure you're requiredto put that on the W 2 there,
Rich.
Rich Kane (40:18):
Anyway.
Let's see.
How do you pronounce it?
Another
Nancy McClelland (40:20):
poll question is and this is one I got from
Diamond.
She actually created this slide.
Which payment methods are alwaysexcluded when preparing Form
1099?
Now, Dan, what was that you saidearlier about taxes and the word
always?
Dan DeLong (40:39):
Never, always.
Nancy McClelland (40:40):
Yeah.
It's not an
Dan DeLong (40:41):
option.
Nancy McClelland (40:42):
Always.
So which payment methods arealways excluded?
Dan DeLong (40:46):
The adult diaper answer.
Nancy McClelland (40:53):
Yes while people are answering that Susie
has a question in Susie has aquestion in chat.
She's got an insurance companytrying to get her to not include
expenses from subcontracts onthe 1099.
That is correct.
You're not you're correct.
Do not have to include theexpenses.
Just the portion that is forservices.
But I've seen a lot of folks dothis both ways.
(41:16):
It doesn't really matter eitherway because the person who is or
the company that is reportingthat income is going to put
those expenses as A a deductionon their tax return.
So it really shouldn't matterwhether they're including that
total in revenue or not, butthat's okay.
You, you can go ahead and issuethem the 1099 without the
(41:38):
reimbursed portion.
Dan DeLong (41:42):
The answer to that, question is it's a trick
question because it's a, neveralways there's always an
exclusion or there's always anacceptance.
That's why
Nancy McClelland (41:57):
again, I just want to mention
Dan DeLong (41:59):
so if it's a rule it will have an exception
Nancy McClelland (42:02):
This is why I love diamonds 1099 payment
method guide.
There's not a referral link.
I'm just telling you This is, asa matter of fact, Dan, you
should get one though, becausehonestly, I feel like everybody
should be using this becauseI'm, I thought when I first saw
this, I was like, wait, not allACH transactions are included.
What's an example of that?
(42:23):
And she's actually going to goover some of these things in our
Ask a CPA session, which is Injust an hour and 15 minutes
there are some really weirdscenarios where you're, paying a
platform via ACH, but theplatform is paying the recipient
via third party merchant servicesituation.
So there are some super complexones and she maintains this this
(42:48):
website to look at all, what allthose crazy exceptions are.
Dan DeLong (42:53):
And if, and that's what I've seen a lot coming in
the q and a in the chat aboutwhat about this, what about
that?
If you could share that link tothat session, Ansy I think that
would be a great a greattakeaway for for the folks that
are asking a lot of thosequestions just to make sure
we're conscious of our, timehere today.
(43:15):
So let's talk a little bit aboutthis form.
10 99 k.
Rich Kane (43:20):
Okay, so the 1099 K is reported from a, like a
processor, and you've got, andthere were some examples, Zelle,
now I've corrected mypronunciation, is not included
in the 1099 K.
So it's your responsibility toany Zelle payments to you for
(43:42):
you to issue the 1099 NEC.
The 1099 K has got.
credit cards, debit cards,Square, Stripe, PayPal, Venmo.
But I know that there's an,instance when I, should explain
this, where it's not included inthe 1099k.
And I'm going to use Matt as my,good guy today.
(44:03):
Let's just say for Matt, I say,Matt, build me and I'm going to
pay me and I'm going to pay me.
Hold on.
I'm going to write a check toMatt out.
I'm going to pay Matt and Iwrite a check.
I'm going to pay Matt.
And Matt says, send it to myPayPal account.
What's the PayPal?
And he says, Matt Fulton.
(44:25):
Okay.
So if it's not a businessaccount.
It's not going to go through theprocessing for a 1099 K if Matt
said pay Parkway set up, as abusiness, it will be processed
and he will get the money on a1099 K.
(44:46):
But if he does it because it'shis personal, that will not be
on the 1099 K because it's goingto his personal account.
Paypal or his personal Venmo?
All right, Nancy.
What are you thinking?
Nancy McClelland (45:01):
I wasn't listening to you.
I was putting that link inWebinar chat like Dan just asked
me to do I have no idea what youjust said, right?
So let's keep moving.
You have to be well, I
Dan DeLong (45:12):
think this is what the government is trying to Get
to right is the people that areto skirt the issue of hey pay me
this way So it's not necessarilyYou Needing to be reported.
And as we're seeing like thelowering of thresholds and those
types of things to be onlinewith, The 1099 NEC form, I think
(45:38):
that's where things, thetattling is going to get.
Nancy McClelland (45:43):
Yeah, which makes our jobs harder because I
was talking about reconcilingthat 10 a nine K against the
revenue that is in your, that ison your profit and loss is,
really challenging.
And before it was 200transactions and.
20, 000 before you were going tobe receiving a 1099 K and now it
is only 5000.
(46:03):
Next year is going to be 2500.
Then it's going to go down to600.
So we are going to be seeing alot more issues here.
This is the slide that Dan wasreferencing earlier when he was
talking about when you havequestions where you're like,
that trick question slide, thatpoll that we had, where it turns
out not all of them areaddressed one way or another,
(46:26):
there are lots of questionslike, Melio, I don't know, I go
into 1099problems.
io.
I don't remember how much itcosts, but it is not
inexpensive.
I think it's a very funny dollaramount for the subscription.
It's I don't know, 10.
99 or something like cute likethat.
Dan DeLong (46:42):
That would be cute.
Yes.
Nancy McClelland (46:43):
Yeah, I don't remember the exact amount.
But it is, a very affordableresource.
And to my knowledge, this is theonly resource out there that
actually lists all of thedifferent methods and answers
your questions about that.
But once you know the method.
Rich has got your answers abouthow to handle that in QBO.
Rich Kane (47:07):
If you're in QuickBooks, both desktop and
online, and you're looking atyour checking account, if in the
check field down below in thelower right corner there, all
those little num, acronyms youput in the check number field,
it will exclude it from going ona 1099 NEC.
(47:30):
And that's in both, that's inboth versions.
So any of those words, like youwere, you wrote debit, anything
close.
Exactly.
You have to have exactly these,but you can tell, then it will
not go on the 1099 NECs.
Dan DeLong (47:48):
What, is mb is that
Rich Kane (47:52):
Not mb Mond?
That I can tell.
Yeah
Dan DeLong (47:55):
If you're paying mb Mary Beth Rami then she gets
excluded.
Is that, but they card typocould be Mc it might be, might
have been a typo for, yeah.
Should be for M mc, forMasterCard.
Could be, is Master
Nancy McClelland (48:10):
C?
Yeah.
I dunno.
I'll say that, that I, ran thislist by Alicia Katz Pollock,
who?
At this very moment in time isactually teaching her 1099
session through royal wise andshe said that there are a few
codes missing on this one, rich.
So I want to send you, I justfound this out very late last
(48:31):
night.
So I'm, publishing her list inthe and, you know what, you're
right, Dan it's a, typo.
It's actually MC.
You are correct.
I just put this list in.
The chat that she gave me.
They were pretty close
Dan DeLong (48:46):
On the, keyboard too.
On the
Nancy McClelland (48:47):
keyboard.
Yeah.
So I do, want to recommend thateverybody if you are doing, if
you're doing 1099s inQuickBooks, take her class, I
think it's just a one hour longclass and it's I don't know, 37
or so it's super cheap.
And if I were doing them, if Iwere using QuickBooks online, I
would totally take that classbecause she gives you all sorts
(49:09):
of tips on that.
And this is one of those gems.
Rich Kane (49:13):
Okay.
All
Dan DeLong (49:15):
right.
What happens when you don't dothis?
Rich Kane (49:18):
There you go.
Those are our due dates.
And you can see that you,you're, you will, you could get
fined.
Now, I'm being honest as anaccountant, in all my years,
I've never seen them come backat me against not filing a 1099.
You could file it late and it's,this is really great slide.
It gives you the due dates andyou don't get a penalty.
(49:41):
I've not seen any penalties forfiling late, but I really want
to.
And Nancy did a superb job is ifyou don't know there's a
question on the tax return thatasks you about 1099s and this is
absolutely phenomenal and shecircled it.
Thank
Nancy McClelland (49:55):
you.
Rich Kane (49:56):
And if you can.
If you're, yeah, I just wantedto highlight that
Nancy McClelland (50:00):
technically, if you look at that middle line,
like there are penalties forfiling them late but I, and I
have been doing this for 23years on my own and for many
years before that and I haveseen the occasional penalty come
through, but I'm mostly alignedwith rich on this one.
I rarely see.
I rarely see the penalties aslong as you're willing to comply
(50:22):
eventually.
It is better to file late thannot at all and the situation
that we have that happens semiregularly is you have a client
who maybe they don't come to youuntil extension season.
It's September or October andyou're filing that return and
they have not prepared their1099s yet or they sent out a
couple but then it turns outonce their books are caught up
(50:42):
that you find you found a fewmore that need to be issued.
You can.
As, a, tax preparer, you're notallowed to mark yes on this if
you know that they have notfiled all their 1099s.
But the question is, did you orwill you?
Not, did you?
And, so you can mark yes if youare like, hey, I'm going to go
(51:04):
ahead and mark yes, get thisfiled.
And then October, November,whenever you get that, you take
care of that 1099 for them, thenyou are allowed to check yes on
that.
Rich Kane (51:13):
Now, the interesting thing is you have a client that
hems and haws I don't want togive them a 1099, show them, you
have to put it on the taxreturn.
This is then it sways.
There
Nancy McClelland (51:24):
are the occasional client that
absolutely refuses and we markno, we say yes, you made
payments that would require youto file Form 1099 and then on
line J, no, you did not file therequired Form 1099.
It's just hey, come on at me,please.
Rich Kane (51:43):
Now I know we're raising that red
Dan DeLong (51:44):
flag.
Rich Kane (51:45):
We're short on time here.
I'll just
Nancy McClelland (51:48):
briefly cover this one.
We don't need to go through thewhole thing.
I'm just gonna, this is theslide for the people in chat who
were asking about it.
IRS 10 matching.
This is what this slide isabout.
This is if the name and the taxID number on that 1099 do not
match the way that the IRS hasyou in there.
So for example, if it's yourpersonal name with your EIN or
(52:10):
your business name with yoursocial security number, and it
doesn't match, they will sendthe issuer these nasty, scary
letters.
They can be ignored if theperson is on the up and up, and
it was simply just a yes,they're reporting it.
So we're good there.
Rich Kane (52:25):
And then the only
Nancy McClelland (52:25):
I also Sorry, go ahead.
Rich Kane (52:27):
Yeah, I want to cover before we lose some time a
little bit and talk abouttiming.
And I think it's importantbecause you could get a tax
notice and I'm going to use Mattas my scapegoat again.
I bill Matt for some services Idid and I send him the bill in
the middle of December.
Matt looks his, it is P and Llike the end of the December
(52:48):
31st.
He says, you know what, I needsome more expenses.
So I'm going to send Rich Let'ssay Richard check, okay, it goes
into his system and his systemis going to process a 1099 for
me as of 2024.
He's going to tattle to the IRS.
They're going to expect to seeit.
But I don't get the check fromhim until the first week of
(53:11):
January and I'm a cash basispayer.
I'm going to deposit it in andgoing into 25.
But when I do the return.
It's already in my transcriptthat it was for 24 and I will
get a notice that says youdidn't declare this on your tax
return.
Here's some additional tax foryou.
So you got to understand thetiming of it.
(53:33):
But that's okay.
Nancy McClelland (53:34):
You just write back.
It's okay.
You get that notice and then youwrite back to the IRS.
And you said, that's because Ididn't constructive, didn't get
constructive receipt of it untilthe following year.
It will be in the followingyear.
And then the IRS says that's,fine.
But so you can get notices thatIt's okay to get a notice.
You just need to be able torespond to it.
Matthew Fulton (53:51):
I think the point though is yes, you can get
those notices.
Every notice you receive isadditional time.
You have to spend on somethingand it's more mental power, all
that stuff.
So if you recognize how thoseline up and especially if you
have good partners in businessthat you can address it with
them ahead of time, it's goingto help everybody all the way
around.
Nancy McClelland (54:09):
Fabulous point spot.
Dan DeLong (54:12):
All right.
So let's talk about in the lastfive minutes that we have, we
may run a little over.
If you're fine to stay, great.
If not, you got to go.
That's totally fine, too.
But let's talk about some of thegreat workflow habits.
And you were mentioning this,Nancy, a little bit ahead of
time.
That adding this to yourworkflows, not at November, not
(54:35):
at tomorrow, actually is a goodway to make sure that you're
ready for this, month of hellthat we have for 1099, right?
Nancy McClelland (54:46):
Yes, absolutely.
So I, I love Keeper.
I'll try to go through thisreally quickly.
They have in their, system,they've got a process.
If you want to go to the nextslide, identify, request,
update, export, identify whathappens is because Keeper syncs
with QuickBooks online.
And you know what, I believesomebody from Keeper, I saw them
(55:06):
in the chat.
Laura is here.
So if you have questions, pleasegrab her.
But yeah, Identify Lauren, thankyou for being here.
Hi.
So, the way that it works is itlooks at the fact that you
created a new vendor.
It says, Oh my gosh, Hey, youmight have, this person might be
a 1099 vendor.
(55:27):
And you just mark yes or no.
This is that screenshot.
Yes, we need potentially need a1099 from them.
No, we don't.
Do we have a W9 on file or not?
All of this stuff.
Get pops up and it asks youthese questions and then you can
go in and look at it and takecare of it.
Go ahead to the next one andthen request an update.
The request is what I wasmentioning earlier where you
(55:48):
actually can request that W 9.
Through Keeper, this is forpeople who, have decided to
spend the eight or ten dollars amonth per client on Keeper, this
is, and they're only using onepiece of it, this is usually the
reason, being able to request W9s directly from You're welcome.
(56:08):
Get that client out of the way,request them directly from the
vendor and do it electronicallythrough Keeper.
And it syncs back to QBO.
It's beautiful.
We love it so, much.
And I have heard that a lot ofpeople have actually gotten new
clients because the vendor getsthis request and they go, Wow,
this bookkeeper's way moretogether than me trying to do it
on my own.
Or than that like Joker CPA overthere who only looks at stuff
(56:31):
once a year.
Yeah, no.
Say reach out to them and say,Hey, are you taking new clients?
So it's a really great featureand then that vendor update is
it's actually Syncing back toQuickBooks online or zero if
you're using it.
Next slide, please And then atthe end of the year and they
just implemented this last yearThis is only the second year
(56:52):
they're doing it and it'sbeautiful You then get all of
that 1099 related data in yourpreferred file format, whether
it's CSV track 1099 or text 1099and you export it.
And then you import that fileinto your program in our case,
track 1099.
And it is actually seamless andbeautiful.
I never, when people talk aboutan integration, I always go it
(57:16):
doesn't integrate, but it is anexport and import to clarify,
but it is beautiful, seamless,it's easy, and it has changed
our lives.
Dan DeLong (57:27):
And then there's options inside of QuickBooks.
If you are using QuickBooksonline there is a new new
automated way, which willsupposedly in theory, do all of
this stuff for you.
But how well do we rely on themachines to, to do all the
(57:48):
things that we need to domanually?
It's supposed to identify whoneeds a 1099 by looking at All
of those things, but again,garbage in garbage out.
So if you're not entering thingsin properly, I wouldn't expect
the machines to make thosecorrections for you to do that,
but it's supposed to automatethe form completion, email and
(58:10):
mail to recipients and track andmanage all of that
Nancy McClelland (58:13):
for a small fee of 14
Dan DeLong (58:16):
per form.
Nancy McClelland (58:17):
14 per form.
Interesting.
I don't know if you got my emaillate last night.
I saw a post on the, yourcommunity on the QB Power user,
QB Power user community.
Which is that the 1099transaction detail report,
(58:38):
several of their 1099 vendorswere missing from the report.
And they called support andsaid, it's a, known issue.
What did you call that?
Dan DeLong (58:46):
The undocumented program feature.
Nancy McClelland (58:49):
It's an undocumented program feature.
So be careful if you're usingQBO and review those lists and
make sure that they're correct.
Dan DeLong (58:58):
So knowing that maybe not a great plug for the
new automated 1099, if there's aknown features.
Known on, Undocumented features,because there still is the
manual processing of 1099s inQBO, which was the old way of
doing things where you wentthrough the wizard or make sure
(59:20):
your mappings were correct.
The thing to keep in mind isthat most Intuit services like
QBO payroll, contractors and QBObill pay include the fees,
right?
So you don't have to pay theform filing fees.
For that, if you are using thoseservices, so just bear that in
mind.
(59:40):
Especially since if they havethis or any of these services
where they are, alreadyincluded, the, filing fees are
done for you, so if you're goingto manage this anyway, by going
through and running thosereports and doing those things,
which may or may not be accuratenow that we've had that tidbit
(01:00:03):
from, Nancy, Just keep in mindthat those things might be
included and I've included linksto the demos and videos and if
you go to our landing page Blogfor this session.
We've got all that on the QBpower our Website and the tip of
the hat to desktop, which ismore and more complicated As,
(01:00:28):
the use go on, it's not
Rich Kane (01:00:29):
easy like it used to be,
Dan DeLong (01:00:31):
right?
You do add a tax 10 99 plugin,or you use the QuickBooks web
connector to synchronize thatfrom QuickBooks desktop to to
tax 10 99.
So if you are using tax 10 99,you can use it with Keeper.
You can use it with QuickBooksDesktop, and then you can use it
with QuickBooks Online if you'reusing it with, with keeper.
(01:00:56):
The link for that as well.
So our last polling question is,did you find this useful?
And there's a two part, yeah,did you learn something new?
I think that's that's.
Nancy McClelland (01:01:10):
Oops, we've still got Avalara in there.
I think that's from the early,December.
Dan DeLong (01:01:15):
That's last year.
Wait a minute.
Nancy McClelland (01:01:17):
Yeah, that was last month.
That's okay.
Substitute already using,instead of Avalara, substitute
either Keeper or QuickBooksOnline or Track 1099 or 1099.
Are you already using something?
I, hope that if you took onething away, it was that this
really should be a year roundprocess because it makes it so
(01:01:40):
that January isn't as hellish.
We all know 1099s.
Suck.
But as Diamond likes to say,friends don't let friends waste
time on 1099s.
So there are ways to make thisbetter.
There are a lot of resources outthere.
I'm going to dump a bunch ofthese in the chat.
Again, we've got my MSN articleon 1099s, which goes through
(01:02:01):
lots of 1099s in addition.
To the NAC and the K.
There is an earmark gig that Idid with Diamond and Keeper last
month on how to integrate 1099Management into your monthly
workflow.
There is the Keeper Prepare1099's Help Center and Diamond's
1099 Payment Method Guide.
(01:02:22):
I am also going to toss some ofmy info on Ask a CPA in there
because, Diamond is actuallygoing to join me in one hour to
do and ask me anything about1099s in ask a CPA.
And if you sign up before thenyou can go into our circle
(01:02:46):
community and, get on it.
We'll see you in an hour.
And I think Dan you, actuallyhave a a promo code for joining.
Dan DeLong (01:02:56):
Yeah there's a, promo code for our, listeners
for for, Nancy's group for 30percent off for three months.
It's on our on our landing pagethere for you.
So it can just go there for thehandouts or the replay or
anything.
You can get the promo code fromthere.
And then also in the handoutsthemselves, we do have an
(01:03:18):
appendix, that doesn't get anappendectomy, right?
So there's some frequently askedquestions and a Q& A in there.
So if you download the, Andthose are from all of the,
Nancy McClelland (01:03:34):
I've done like a ton of these 1099 talks
before, and I get a lot ofquestions and I try to go back
and answer the questionsafterwards.
And that's what all of theseFAQs are from.
Dan DeLong (01:03:47):
Rich, Nancy Matthew always great to see you.
We really appreciate Nancy andRich coming together for for
this fighting, dueling CPAs, and1099 discussion.
Any closing remarks or thoughtsfrom either of you two?
Nancy McClelland (01:04:08):
I'm just so glad that you're providing this
resource for people because it'strue.
1099s shouldn't be this hard,but.
They really are and you needresources and you need education
and it's just so wonderful thatDan, that you and Spot are
providing this space to invitefolks like Rich and I, who've
seen, we've seen a few 1099Seasons in our time.
Rich Kane (01:04:32):
Great.
Yeah, we had a bunch of tipshere.
So at least we've gotten someeducation out and I feel better
about that.
Dan DeLong (01:04:42):
Do those tips need to be reported on the 10 99?
Yeah.
Funny.
Rich Kane (01:04:46):
You
Dan DeLong (01:04:47):
a funny guy there, guy
Nancy McClelland (01:04:48):
Dan.
I'm getting some comments in thechat that the it, there's a save
30% off ask a CPA link on the onyour thing, but it just goes to
my website and there's no promocode listed.
I do not remember what thatpromo code is.
I'll add
Dan DeLong (01:05:05):
it and put it there.
Fronto, as soon as we close outthe session here today.
Nancy McClelland (01:05:12):
All right.
I'm going to take a quick lookfor those of you who are still
on the call and are desperate toknow the answer.
Give me just a moment herebecause I can pull it up from
one of these emails.
Okay, but the discount code.
Oh, it's really straightforward.
QBPH 30.
QBPH 30.
(01:05:33):
So that's QuickBooks Power Hour.
30 QB PH 30.
There it is.
So for anybody who would like tosign up, you get 30 percent off
the first three months.
And for any of you who sign upin the next hour, we will see
you soon.
I also saw a lot of ask the CPAmembers in the chat, so I can't
wait to see you guys later.
Thank you so much.
Dan DeLong (01:05:51):
All right.
We appreciate you joining us.
Nancy McClelland (01:05:53):
Wonderful day.
Dan DeLong (01:05:55):
Likewise, and next time we're going to be talking
about copy QuickBooks onlinedata.
So hopefully you join us on thenext QB Power Hour for how to
copy QuickBooks online data fromone file to the other or import,
export.
So it should be a good,
Nancy McClelland (01:06:12):
I'll be there for that.
Matthew Fulton (01:06:13):
The only thing more complicated than 1099s.
Welcome everybody to 2025.
Another great, great day to bealive, to be alive when you
consider the alternative.
So we have a star studded, castwith us here, joining us here
(00:50):
today for for our first newpower hour of 2025.
I got.
1099 problems, but a workflowain't one.
So we'll go around the go aroundthe horn here, introduce
everyone.
And we'll kick it off causewe've got a lot of.
Stuff to cover and a short timeto get there.
(01:11):
So this is like the smoking, thebandit version of QB power hour
today.
my name is Dan DeLong owner ofDanwidth and school bookkeeping
worked at Intuit for nearly 18years.
Co hosting today, as well as theworkshop Wednesday over at
school bookkeeping, doing otherthings as well.
So spot.
Matthew Fulton (01:33):
Matthew Fulton here.
My friends call my spot.
I am the co creator of QBcommunity, live Facebook group,
founder of Parkway businesssolutions, and happy to be here
with all these amazing people totalk about all our 10 99
problems.
Nancy McClelland (01:48):
Hi everyone.
I'm Nancy McClelland.
Most of you know me as thedancing accountant, and I'm so
excited to be here today is myfirst QB power hour on this side
of the camera, and I'm reallygeeked about that.
I have run my own CPA firm forthe past 23 years, a hyper local
firm in Chicago, Illinois.
Have an award winning blog andan MSN column.
(02:10):
I'll actually be sharing an MSNarticle that I wrote on 1099s
for you to make your life alittle bit easier.
And my big passion project isthat I run ask a CPA, which is a
membership community forbookkeepers who want to ask a
CPA questions that they can'tfor whatever reason, ask their
own clients tax repair.
And yeah, I'm a dancer too.
Dan DeLong (02:33):
So I need, I do need to ask you which came first,
this is a chicken or the egg,dancing or accounting or, Oh,
definitely
Nancy McClelland (02:41):
accounting.
I, actually didn't become adancer until 12 years ago.
It was yeah.
Yeah.
As a matter of fact, my companyused to be named Nancy
McClelland LLC, which was justriveting, exciting name that
really says so much about me.
And a client who saw me at adance performance at a pro bono
(03:05):
client of mine, a park in ourneighborhood.
I was in my full go 1960s goregalia and I walked up and saw
her there with her kidspicnicking and she said, look
kids, it's the dancingaccountant.
Dan DeLong (03:19):
And then it's stuck,
Nancy McClelland (03:20):
right?
Dan DeLong (03:22):
I actually was a dance mom, raising the kids,
Nancy McClelland (03:27):
oh my gosh, I had no idea.
We got so much to talk about.
Dan DeLong (03:30):
Yeah We don't want to, we don't want to take that
time now.
We'll do that offline because wegot to talk about Rich.
Rich, the dueling CPAs todayNancy and Rich are going to be.
Rich Kane (03:43):
And we're both dueling from, based in Chicago.
We've got good representationhere.
Now, I'm not like Matt.
I don't want to go by a nicknamebecause my nickname would be
Dick and it's got very negativeconnotations.
So we're not going to go thatroute.
I'm a CPA, I'm a long term proadvisor and I've been, we're
(04:06):
going to offer some wonderful1099 tips for everybody and try
and make it humorous and funnyand enjoy this wonderful topic.
Dan DeLong (04:17):
And, I got to say Rich was one of my favorite
customers when I worked atIntuit to talk to, right?
He was always very.
What's the best way to describeit?
He was always very gracious,even when because when you have
a problem with QuickBooks, it'semotional, right?
(04:40):
The last thing you want to dowhen When you're working inside
of a tool, whatever it is, havean obstacle to the, to that
solution, whatever it is thatyou're trying to do it.
If you're trying to do 10 99sand there's a, there's an error,
as we see in the Facebook group,known issues, as they, come up
(05:01):
we call them undocumentedprogram features.
He was, a great, one of thegreatest people to talk to
because he understood that Thepeople on the phone were
typically just the messenger andhe never took it out on the
messenger.
So even, when there was aproblem, he was very gracious to
(05:22):
that.
And I always loved to, See hisname pop up on the screen pop.
Okay, this is going to be agreat conversation.
I'm not going to
Nancy McClelland (05:29):
notice that Dan cannot say any of those
things about me.
So and then that's, absolutelytrue.
I am not that person.
So bless your heart, rich.
Somebody has to be the good guy.
Good cop, bad cop, right?
Matthew Fulton (05:42):
And I'm also hearing there is ways to flag
people behind the scenes as goodperson to talk to and not a good
person to talk.
I always felt it had beenflagged that way.
But anyways,
Dan DeLong (05:51):
there was there was a guy that worked there and you
probably have talked to him Richand Nancy Tony Calabrese.
He ended every, call that said,you're my favorite pro advisor
says right here on my nose.
Great guy.
(06:12):
But a little bit about the QBPower Hour it's every other
Tuesday at 12 noon Eastern.
The upcoming webinars, as yousaw from the, little intro, we
are now doing CPE credit withit's the earmark app.
We will have poll questions andthings like that, but that
doesn't count for attending thelive the live webinar like
(06:34):
today.
When you do live CPE credit wewill have poll questions, but
five to seven days after thelive webinar They will create a
course for you In the earmarkapp that you can go into take
those take that quiz And that'swhat gets you your CPE credit.
We won't be issuing CPE creditwith our friends at makers hub
(06:58):
that we're doing the live onesBut the good news is that every
Kibbe Power Hour will beeligible for CPE credit, just
not on the live one, it's goingto be in the five to seven days
after.
So once we have our channelestablished we will continue to
socialize that, so you canalways pop into the QB Power
(07:18):
Hour channel on EarMark, takeyour, quizzes after attending,
or you'll be able to replay ifyou forget what we talked about
I, have a goldfish brain forgetwhat I did just a second ago.
You can review it, take thequiz, get your CPE credit
(07:39):
through, earmark if you do needthe slides, the recordings, the
podcast those types of things,you can always go to
qppowerhour.
com to watch resources, and I dobelieve we are socializing the
handout, no, I am doing it hereon the, stream but the link for
(07:59):
the handout for today, we'll putthose in the chat.
So I already talked about theCPE sessions.
If you want to do the QR code toget the, app, there is a free
option.
Nancy you, do yourself on yourmark as well for free.
You can do one CPE a month orsomething like that.
(08:21):
If you do know about.
Yeah, I don't know.
I don't
Nancy McClelland (08:24):
remember the specific.
I don't remember the specificrules because I think that what
they do is so amazing thatpaying for it is just, it's like
right tool, which, oh, by theway, I'm representing today,
right tool.
There are certain, things outthere where I'm just like,
they're doing such great thingsthat I will use the paid
subscription just because I wantto thank them.
(08:44):
I just want them to continue toexist.
But I do believe that you canget it.
Between one and three CPE permonth for free through earmark.
You do have to sign up for anaccount, but they have unpaid,
versions of it.
Yeah.
Dan DeLong (08:59):
All right.
And a little bit ofhousekeeping.
So if you have specificquestions about 10 99s, we put
them in the Q and a, because itmakes it a lot easier to see
those as, we're scrolling bybecause if you put just stuff in
the, comments, in the chat thatwill, quickly, scroll by and if
we're not catching it.
(09:20):
We don't see it.
So if you have specificquestions for the topics that
we're talking about today,please put them in the Q& A.
We have just general things tosay.
Please put them in the chat, inthe comments.
And we have the, handoutsavailable on the slides.
We also do have the QB PowerHour store.
If you want to check out someflag there about the QB Power
Hour.
(09:41):
Always can do that.
So what's on the agenda today?
we'll be talking about.
In general 1099s reallyshouldn't be this hard and I was
talking to Nancy before beforethe webinar that it was super
easy not, too long ago.
It was really just, there wasone form that QuickBooks did.
(10:02):
There was a sweet
Nancy McClelland (10:03):
spot.
Yeah, there was this, it wasreally hard years ago when you
had to do everything.
manually and you had to run tothe post office right before
midnight on the day that theywere due to the IRS, right?
That was awful.
And now things are terriblebecause there's so many
different payment methods andeverything's so confusing, but
there was this amazing sweetspot that lasted for I don't
(10:25):
know, I feel like seven years orsomething where it, it wasn't
miserable, but it is.
I don't know.
The envelope, trying to find theenvelopes.
Oh, gosh.
Oh, those perforations.
Oh, gosh.
Yeah, no.
From when they started.
Three
Dan DeLong (10:40):
forms a page or four forms a page or whatever.
Yeah.
Nancy McClelland (10:45):
Oh, God.
And when the windows didn't lineup.
Yeah.
Those were the really awfuldays.
What we have today is at leastbetter than that, but it's worse
in different ways.
I don't know if you saw that Istuck that into this slide.
You just had the 1099s shouldnot be this hard and I'm the one
that put, but they are, I snuckthat in there.
Dan DeLong (11:02):
Always appreciate your your color commentary.
All right, but we'll with Richand we'll be going through the
1099s and W9s fundamentalsbecause it's always good to
reframe or rebase yourself, on,What am I, in for this, season?
(11:23):
Is there any new changes, thosetypes of things, and then how to
streamline that process and thenwe'll have some Q and a, as we
go through a session here today,we'll start our first polling
question is a two parter.
Do you assist your clients?
I got to hit the launch button.
Do you assist your clients inpreparing 10 99s?
(11:45):
And if so, what do you use tohelp prepare them?
And I don't know, did Spot, wereyou able to put the link for the
handouts in the You know what?
I didn't get that one.
Matthew Fulton (12:03):
I'll, get on that right away.
Just one second.
Nancy McClelland (12:07):
So while this is up I see it says hosts and
panelists cannot vote and I'mreally bummed about that because
I love, polls.
But it's interesting becausethat second one says, what do
you use to help you prepare andfile them?
And one of the options iskeeper, which is what we use
and, love.
And I'll be speaking to that alittle bit.
(12:27):
Okay.
Later, but I want to clarify foranybody who is confused about
that answer.
You don't actually file 1099through Keeper.
You use Keeper to assist you.
It gives you a report of what1099s you should be filing and
the information you would needfor it.
It does sync with QBO.
And then from there.
You could either use QBO toprepare them.
(12:50):
You could.
There's an export for tax 1099and there's an export for track
1099, which is what we use.
So I just wanted to clarifythat.
Dan DeLong (13:03):
All right, I'm sending Kathy the slides and now
everybody should be able to seewhich
Nancy McClelland (13:08):
is similar.
I'm going to respond to whatRoberta is saying that they use
both QBO and tax 1099.
Again, a lot of these, you canuse QBO and file them through
QBO.
You can use, QBO and file themthrough tax 1099 or track 1099.
You can use keeper, which syncswith QB.
There's so many options, whichis why they're hard, right?
(13:30):
When you.
Dan DeLong (13:32):
And there's so many different iterations of
different companies and they allhave a similar website, right?
Is it track 10 99 com or tennine com or 99 tracking.
I don't even know if thatexists, but it, there's
somewhere it can be
Nancy McClelland (13:53):
confusing it.
Dan DeLong (13:54):
Yeah.
Yeah.
It, you could definitely confusewhich service it is because the,
names are so, similar.
I just dropped
Nancy McClelland (14:04):
a link to the Keeper Prepare 1099's help
center in in the zoom chat, spotwhen you have a second, no
hurry, if you can make sure toshare those to the other socials
because actually their helpsection is, really comprehensive
and lovely.
So really helpful.
Dan DeLong (14:23):
Go ahead and launch the share the results here.
So definitely 89 percent of thefolks on the call here in the
zoom answered that they doassist.
So I appreciate you taking anhour out of your day to attend
this in the midst of helpingyour, client prepare 1099.
(14:44):
But, we typically do things whenwe have to.
So those deadlines are fastassuming.
Yeah, 1099s really shouldn't bethis hard like determining and
tracking which 1099s, whichclients want the 1099s prepping,
(15:05):
identifying 1099 eligiblevendors, determining vendor
entity types, because that's aOkay.
That's something to considerdefining what constitutes a
service, determining who paidfor the service, reimbursement,
calculating 1099 eligible yearto date spending, dealing with
(15:26):
vendors who refuse to fill outthat W 9, never happened,
missing a 1099 vendor because itwas an unusual account, waiting
until the year end to identifyall those vendors and collect
those 1099s,
Rich Kane (15:42):
We're tracking it all in a CSV.
Dan DeLong (15:46):
Thoughts about this, Nancy if you're in your opinion,
Nancy McClelland (15:52):
it doesn't have to be this way.
It doesn't have to be this way.
Dan DeLong (15:57):
I'd like to ask Dwight.
Is that Dwight with the firefrom the officer?
Matthew Fulton (16:03):
Yeah.
And an ostrich it looks likealso.
Question for people real quicklyin the chat that are watching
this.
What month do you guys startthis whole process of 1099 ing?
We'd love to hear when everybodygets started each time.
Nancy McClelland (16:19):
And actually, while people are thinking about
that I, want to mentionsomething far before we started
using Keeper, we transitioned tomaking 1099 part of our year
long year round workflow.
And I feel like no matter, it'snot the technology is an
important piece of this puzzle.
The fundamentals that Rich isgoing to go over are an
(16:41):
important piece of this puzzle.
But, if.
Your first as you're closingJanuary, you're identifying
potential 1099 vendors andcollecting W 9s at that point
And you're tracking themthroughout the year.
Keeper makes that very easy Buta couple of years before we
started using Keeper We you knowcame up with some reports in QBO
(17:04):
that our team was reviewingevery single month as part of
the monthly close and thatChanged our lives completely.
So I would say if you take onepiece of information away from
this It's your biggest.
Your biggest bang for your buckis to start making this i'm
seeing a lot of people sayingdecember Somebody said tomorrow
(17:25):
which is cracking me up.
If you're starting tomorrow for2025, 10 a nine preparation,
then that's awesome.
Matthew Fulton (17:40):
They'll still get done.
We've got what 24 days, 23 days.
Sorry, not including it'sactually less than that,
depending on the app, but I'msure you guys will talk about
that.
Dan DeLong (17:51):
Yeah.
So let's, speaking of thefundamentals, let's turn it over
to rich here and talk aboutthese 10 99 fundamental.
So I'm going to be driving theslides, right?
So whenever you say.
Rich Kane (18:05):
People
Dan DeLong (18:05):
Ask to the next slide.
Rich Kane (18:07):
Let's take it to the basic fundamental.
What is a 1099?
And the best way I can describeit.
You are tattling to the IRS thatsomebody you paid somebody some
money.
That's probably the best way Icould tell it.
It's an infant.
It is.
It's an informational return.
You're letting the IRS know thatsomebody you paid somebody some
(18:30):
funds and they We'll put it intotheir system and their
expectations are is they willsee it on the recipients.
Tax return.
That's the fundamentals of it.
So it's how do we get theinformation?
How do we tattle correctly?
And you're going to get allkinds of variations in there but
(18:53):
the first thing that I tell myclients if it's an individual in
LLC Corporations do not get oneS corps don't get one but
attorneys do for some reasonthey have singled out attorneys
And we're going to talk about, I
Nancy McClelland (19:12):
said,
Rich Kane (19:14):
the next one is going to become as accountants.
And so far we haven't, but, it'sfunny you, in that last slide,
you said when do we get theinformation?
We're always begging our clientsin January.
Who was this person?
Can you get their address?
Can you get their tax id number?
Oh, they're from anothercountry.
(19:34):
They're gone.
I can't find them So there issome ramifications if you get
audited and they find that youdidn't declare it on the
Positive side, get the tax IDnumber before you write the
first check or the first paymentyou make.
At least you have their tax IDnumber.
(19:55):
Is it 100 percent correctsometimes?
No, but at least we've got somenumber that we can say that
we've at least tried to get it.
Now, as you look here on thescreen, there's all these
variations of tattling to theIRS and you can see, and what
they do is they put it on yourrecord in your transcript.
(20:16):
They're going to be expecting tosee it somewhere in your tax
return.
So if you'd want to blow it off,the IRS will know.
Now the rules are 600 for anNEC.
And I hate acronyms.
So NEC stands for non employeecompensation.
That's one of the most commonones that people, outside
(20:39):
contractors, they dread.
They don't want the IRS to knowbecause they don't want to have
to report it.
Sorry.
You get all these variations ofit.
However, if the client wants todeduct that expense on their
return, they need to give them a1099.
Now, some I guess I get isoffice cleaning.
(21:01):
The people come and they do theoffice cleaning.
So you pop them you give themcash out of the petty cash fund.
Technically you're using that asan expense.
You do need to get theiraddress, their tax ID and issue
the 1099.
Anyone that's made over 600 willgo on to the NEC, and the other
(21:22):
common one that we see is themiscellaneous ones.
And really the differencebetween the NEC and the
miscellaneous ones is if you'reon an NEC, you must also pay
self employment tax on thoseamounts in that 1099.
That's Social Security andMedicare.
(21:43):
If it's on a miscellaneous form,you do not need to pay the self
employment tax.
So Dan can, advance to the nextslide.
Can
Nancy McClelland (21:53):
I'm sorry, tax preparer here, I, would not,
say, if it's on an M, if it's onan MISC, you do not need to pay
self employment tax.
I would say it's a lot less tax.
Likely, but there are definitelyinstances where you might, for
example, receive royalties.
And if you receive royalties forintellectual property that
(22:15):
you've created, for example,you're an author and you're
receiving royalty and you fileit as Schedule C, that would go
on your tax return.
So I just got a thing.
Rich Kane (22:23):
I'll give you that one.
Nancy McClelland (22:24):
Okay.
I appreciate it.
Dan DeLong (22:26):
Okay.
What I'm hearing is never alwaysis not a thing.
With taxes.
Nancy McClelland (22:34):
With taxes.
The answer is always it depends.
Yeah, always it depends.
Now the screen you're looking atright now, I'm sure all of you
on this call are familiar withform W 9 but do you see that
little thing that's popped outin the chat?
The lower right hand cornerthere.
Those are a couple of thescreens from within Keeper that
(22:58):
is, I'm not going to go throughfull demo or anything like that,
but when we're in Keeper, we geta notification that says, Hey,
you have added new vendors sincelast month's clothes.
Please take a look.
Some of these might be potential1099 vendors.
They might not have gone pastthat.
(23:19):
They might be a corporation whoknows?
They're just saying, Hey, maybe,and you go and you take a look.
And if you need to request ifit's AT& T, you say, no, they're
a corporation.
I don't need this.
Don't ever remind me about themagain.
But if it's somebody that youneed to request a W 9 for, you
can actually do that.
From within the system, what aslong as you obtain the vendor's
(23:43):
email address from your client,you can then request it from
within Keeper and they can fillit out.
The vendor can fill it out andright there.
It's an electronic thing and itwill create a full W 9.
They sign it and everything andit syncs up.
to QBO.
So even if you don't use theexport from Keeper to prepare
(24:07):
your 1099s, this is just areally nice way to get those W9s
and get them attached to thevendor record in QBO.
Dan DeLong (24:16):
And there was a question,
Matthew Fulton (24:20):
go for it Dan, I think we're doing the same
thing,
Dan DeLong (24:22):
sorry.
Kathy asked if you could clarifycorporations no for C corp, yes
for S corp, or?
No,
Nancy McClelland (24:31):
no, corporation.
And then what about LLC
Dan DeLong (24:33):
that isn't S corp or partnership?
Nancy McClelland (24:35):
So no corporation of any kind, and
that would mean C Corp, it wouldmean S Corp, it would mean non
profit, it would meancooperative, it would mean,
housing association in moststates.
Anything that is, was formed asa corporation or, to the other
(24:55):
point that she made, has acorporate election.
So if you are, as we are, asingle member LLC, and we have
made an election through Form2553 to be treated as an S corp.
We are a corporation for thesepurposes.
So anyone who is a corporationof any kind or who has elected
(25:16):
corporate tax treatment.
Thank you for clarifying that
Dan DeLong (25:19):
with the exception of attorneys
Nancy McClelland (25:21):
because they can't be trusted.
Dan DeLong (25:28):
Okay, so rich.
Okay, bring us back to thisform.
Any C.
Here's your NEC
Rich Kane (25:34):
non employee compensation, box number one.
That's the amount of servicesthat you have rendered.
Now this is supposed to be justfor services.
Now if you paid somebody some,reimbursed them back for
expenses, generally you're ableto, in your accounting software,
you're able to say, officesupplies or supplies is not
(25:58):
going to go on to the 1099 form.
It's only supposed to be forservices, not for any other in
what I call incidentals.
Also on here in box one is whereyou would put attorney's fees,
For doing normal legal work, sothey, you have an attorney, he
(26:20):
reviews a contract, he does anemployment agreement, he
reviews, some documents you havein his normal everyday, of
course, of doing legal work.
Legal work that goes in boxnumber one.
Now if you're paying an attorneyto settle a case for you, one of
(26:44):
those attorneys that work onpersonal injury and you're
paying the attorney to thesettle a case.
That will not go on the NECform.
That will go on themiscellaneous form.
Nancy McClelland (26:57):
And if I can clarify, if you're paying the
attorney, you're going to wantto use the NEC.
If the attorney is receivingsettle settlement from the case,
so like maybe the court gave youthe money.
And you are paying it normallythe court will pay the attorney
directly and you won't have toworry about this but every once
in a while, you'll receive thesettlement funds and you need to
(27:18):
pay the attorney their portionof it.
That's what rich is referring tohere so very unusual situation.
Rich Kane (27:25):
But
Dan DeLong (27:26):
it happens.
Rich Kane (27:27):
MISC form.
Now the MISC form that's by,let's see, I'm trying to see
here where it says the legalfee.
Box 10, gross proceeds paid toan attorney is what we were just
talking about.
In box one, if you pay rent andyou have a landlord and you're
paying the rent to a,corporation here, I believe all
(27:51):
rents you're saying nocorporations for rents.
Nancy McClelland (27:54):
Nope.
No corporations.
Don't have to worry about it.
So if
Rich Kane (27:57):
you rent from an LLC or you rent from an individual,
you will need to get your rentin there and send them a 1099
form.
Nancy McClelland (28:09):
So this would be a situation where I would
request a W 9 because there area lot of folks who have LLCs and
there's just no way for you toknow whether they have a
corporate election or not.
But for rentals, most folkschoose not to be a corporation.
So I find that this is one ofthe biggest mistakes that people
make is that they're notreporting rents on the MISC.
(28:31):
It's, it happens a lot.
And also let's admit it.
Landlords hate to actuallydeclare everything that they
make, and they are some of thehardest ones to get the W 9s
from.
So I have a little trick that Iuse, which is I have language
that's actually saved internallyin our document that all of our
team members have access to.
(28:52):
And the language basically sayssomething like, Oh, I'm so
sorry.
I understand that you don't wantto file to prepare the W nine
for us.
But if you don't, we have tosubmit the 10 anyway, with the
box checked that you refused togive us your tax ID number.
And that usually triggers anaudit.
(29:13):
And none of us want that.
Rich Kane (29:15):
Correct.
Dan DeLong (29:18):
Couple questions.
Do you report retainers paid toattorneys or does that go?
Rich Kane (29:31):
Yeah, normal course of business with an attorney
goes on.
Nancy McClelland (29:34):
Oh, actually, I'm just now realizing what that
question really is.
You're saying is this cash oraccrual, right?
Because the retainer wouldnormally be sitting on your
balance sheet in prepaid expensebecause it hasn't been used up
yet.
Yes, because all 1099 forms arecash.
Basis.
So if you paid it to them, samewith prepaid rent.
If you paid it to them, it goeson the 1099 regardless of
(29:57):
whether it has been earned bythem or not.
I'm thank you for that's a greatquestion.
Dan DeLong (30:03):
Yeah.
So when is it not needed?
Nancy McClelland (30:07):
So this is one that I, love this question
because this is where1099problems.
io, which is one of my favoritewebsites this time of year
Jennifer Diamond, who I think Isaw pop up a couple of times in
the zoom chat.
She has gone so far into theweeds on this question that
(30:28):
occasionally I joke that it'shard to find her.
Because she just lives in theweeds of the payment methods
question and this is this is Themain point that she tries to
make, which is instead ofdeciding when you've got a
payment method where NEC isneeded, think of it as the other
(30:51):
way around.
If the payment is reportable onForm 1099 K, which means a
merchant services company, likecredit and debit card company,
or anybody doing third partyelectronic payments, Some forms
of Venmo, some forms of PayPal,etc.
and so on.
If they are reporting thosereceipts on Form 1099 K for
(31:16):
these services that arerendered, then It is something
that you do not have to use NECto report.
And so if you look at it, forme, that was like a game
changing perspective.
Instead of being like whatcounts for NEC?
What kind of payment methodscount for NEC?
Find out if 1099 K is beingissued by whatever platform
(31:36):
you're using.
And if so, you're off the hookfor the NEC.
Dan DeLong (31:42):
Yeah, we'll talk about what gets excluded and how
QuickBooks determines that.
Hopefully if we have enoughtime.
Time here.
So let's continue on herebecause this 1099 K is
relatively new to the whole 1099shenanigans, and I think that's
what that's maybe a triggerevent that started to make this
(32:05):
more harder for people who arepreparing them is the excluding
those certain types of paymentsbecause now 1099s are created by
somebody else For something thatyou used to, provide,
Rich Kane (32:22):
remember is you only want to be tattled on once.
You just if you, if it's the1099 cave, because it's a, you
use a credit card or a paymentplatform.
If it's on the 1099 K, and you.
Don't remember that or you don'tthink and you put it on an NEC,
(32:43):
it's going to get into the IRStwo times and they're going to
be expecting both of those.
So be careful.
So you only get tattled on onceand you only have to be
concerned one time rather thantwo.
Nancy McClelland (32:57):
Something I want to briefly mention about
the 1099k is that you do you,you are going to have to deal
with this as bookkeepers.
You're going to have to dealwith this on the other side of
it as well, because your clientsare going to be receiving 1099k
and there can be a lot ofchallenges.
With reconciling that 1099 Kagainst the revenue line on your
(33:18):
profit and loss becauseeverything's included in 1099 K
all of the receipts.
So it's got things that tipspayable gift cards purchased,
but not used yet.
It's got one of the biggest onesis sales taxes go into that
total.
It's just, it's awful.
It's a really terrible,frustrating form.
(33:40):
Go ahead.
Rich Kane (33:42):
All correct.
Yeah.
Tips, restaurant tips go intothe 1099k.
You can't really tie out on yoursales because you're not
including those items.
It's just.
Very
Nancy McClelland (33:54):
controversial.
Lots of challenges there.
Rich Kane (33:56):
Yeah.
Okay.
Dan DeLong (33:58):
So if you're not getting to the deadline there is
an option to extend it.
You can file an extension formbecause you
Rich Kane (34:02):
haven't filed your 1099s.
So if my recollection It's my
Nancy McClelland (34:10):
understanding, Rich, that we, this is not
actually something that we'reable to do in most situations.
There are very specific 1099sthat this applies to.
And so I would be really carefulwith this form and look up
whether you actually qualify forthe extension or not.
It's not one of those thingslike tax returns where you get
(34:32):
an automatic, yay, you don'thave to have filed your 1099s
yet.
So I would, look closely at theinstructions for this form
before deciding that you don'tneed to worry about that January
31st deadline.
This is not as, this is not asall encompassing an extension as
most people might think.
I didn't see this in the slidesand, didn't catch it in time.
(34:54):
Sorry,
Dan DeLong (34:56):
audit the audit of the slides.
Rich Kane (34:58):
Yeah.
Dan DeLong (35:00):
All right.
Let's talk.
Yeah, talk about let's talkabout meeting that deadline.
So we don't have to worry aboutthe extension.
Rich Kane (35:11):
So the, NEC forms are due to the recipients must be
postmarked by January 31st,unless that's a Saturday or a
Sunday, then you get a littleboosting of a couple of extra
days.
But the 31st is the NEC ofJanuary, and you're supposed to
send that in.
(35:31):
And the reason for this is tocombat fraud.
The sooner that the IRS getsnotified of it.
The sooner that they can beaware of it, and it's not
lingering around.
The miscellaneous, they give youan extra month for till 228.
(35:52):
So that was the reasoning behindgetting that out.
And you're right, Nancy, severalyears ago, it was never this
hectic, it was always February.
Then they pushed in the Januarydate for the NECs, and we're
scrambling to get all this stuffout.
Nancy McClelland (36:05):
The deadline's actually the end of March if
you're e filing and most of usare required to e file because
our clients usually have morethan 10.
And if we as a firm are filingfor more than one client where
are usually required to e file.
And the deadline for MISC andmany of the others is actually
the end of March if you're efiling, the end of February if
(36:27):
you're paper filing.
But oof, that NEC date being the31st of January, that is where
everything changed.
That's when everything got somuch more stressful.
now I wanted to mention herethat you or your clients, and I
saw a couple of peoplementioning this in chat So we,
(36:48):
did address it on this slide.
You or your clients might end upin a situation how rich was
saying you only want to tattleonce.
So if you have payments going tocontractors through gusto, or I
believe this happens in payrollservice.
Payroll, yeah, that's what Gustois, a payroll service.
(37:10):
So yeah, I don't know about theother ones cause we only use
Gusto, but yeah.
So there are lots of differentservices that will prepare the,
they will pay your contractorsfor you electronically and they
will prepare that 1099 NEC forthem, but let's say that I pay
rich through Gusto and I paidhim however many 700 or
(37:32):
something, Gusto sends him a1099 NEC for seven hundred
dollars, but then I also paidhim directly from my bank
account, right?
I wrote him a check or I senthim a Zelle or something like
that.
In that situation, I would alsoyou can either take those things
and fill them in on your payrollcompany and say Oh, hey, wait
(37:55):
Make it for hire, but that's areal pain in the butt.
So I have confirmed that you canissue two 10 and nine NECs from
the same company.
You just don't want to duplicateany of that.
So if I paid him 700 throughgusto and I paid him 700.
With check, then I would issuehim another NEC from our company
(38:16):
as well, but I'm preparing itfor that 700 now.
A best practice is in our firm,we will often issue those even
if they're below the 600threshold because the whole NEC,
the amount issued by Gusto andthe amount issued by us exceeds
600.
I have not seen any IRS guidanceon that, but that's how we're
(38:38):
handling it as a best practice.
Rich Kane (38:41):
You don't have to issue it.
You can issue it for less than600.
Do you have an, I have one weget this poll question up and
that actually came from me.
I'd like to know how topronounce this particular
processing.
Dan DeLong (38:57):
There's three.
I did, add another option.
It's at Zelle like bell, Zellelike belly or zeal like wheel.
All
Rich Kane (39:09):
sorts of ways.
There was an instance that Iwould issue a 1099 for less than
600.
Let's say you had a contractorcome out and painted your place,
and he did a really, for 500,and he did a really crappy job,
and he won't come out, he won'tadjust it.
Boom, I'll cut the 1099 becausethen he's, I'm tattling on him
(39:30):
and he's got to cover it.
Another one that I less issuesfor less than 600 is how many of
us have had employees who askedfor a loan and they'd have that
loan and then they quit on youand you didn't get a chance to
recoup it.
We'll scroll.
Okay.
I'm now out the money per se.
So I'm going to issue the 1099.
At least they got to pay tax onit.
Nancy McClelland (39:51):
Yeah.
If they're an employee, I wouldhave run that.
I would run that through theirfinal paycheck.
As W2 percent.
Yeah.
Half
Rich Kane (39:59):
of them don't even remember it's on the books and
you get to the end of the year.
Oh, that person's no longer withus.
And if they're a great employee,we let it slide.
And if not it's just one way tozing it.
All right.
I don't think you're allowed
Nancy McClelland (40:12):
to choose on that one.
I'm pretty sure you're requiredto put that on the W 2 there,
Rich.
Rich Kane (40:18):
Anyway.
Let's see.
How do you pronounce it?
Another
Nancy McClelland (40:20):
poll question is and this is one I got from
Diamond.
She actually created this slide.
Which payment methods are alwaysexcluded when preparing Form
1099?
Now, Dan, what was that you saidearlier about taxes and the word
always?
Dan DeLong (40:39):
Never, always.
Nancy McClelland (40:40):
Yeah.
It's not an
Dan DeLong (40:41):
option.
Nancy McClelland (40:42):
Always.
So which payment methods arealways excluded?
Dan DeLong (40:46):
The adult diaper answer.
Nancy McClelland (40:53):
Yes while people are answering that Susie
has a question in Susie has aquestion in chat.
She's got an insurance companytrying to get her to not include
expenses from subcontracts onthe 1099.
That is correct.
You're not you're correct.
Do not have to include theexpenses.
Just the portion that is forservices.
But I've seen a lot of folks dothis both ways.
(41:16):
It doesn't really matter eitherway because the person who is or
the company that is reportingthat income is going to put
those expenses as A a deductionon their tax return.
So it really shouldn't matterwhether they're including that
total in revenue or not, butthat's okay.
You, you can go ahead and issuethem the 1099 without the
(41:38):
reimbursed portion.
Dan DeLong (41:42):
The answer to that, question is it's a trick
question because it's a, neveralways there's always an
exclusion or there's always anacceptance.
That's why
Nancy McClelland (41:57):
again, I just want to mention
Dan DeLong (41:59):
so if it's a rule it will have an exception
Nancy McClelland (42:02):
This is why I love diamonds 1099 payment
method guide.
There's not a referral link.
I'm just telling you This is, asa matter of fact, Dan, you
should get one though, becausehonestly, I feel like everybody
should be using this becauseI'm, I thought when I first saw
this, I was like, wait, not allACH transactions are included.
What's an example of that?
(42:23):
And she's actually going to goover some of these things in our
Ask a CPA session, which is Injust an hour and 15 minutes
there are some really weirdscenarios where you're, paying a
platform via ACH, but theplatform is paying the recipient
via third party merchant servicesituation.
So there are some super complexones and she maintains this this
(42:48):
website to look at all, what allthose crazy exceptions are.
Dan DeLong (42:53):
And if, and that's what I've seen a lot coming in
the q and a in the chat aboutwhat about this, what about
that?
If you could share that link tothat session, Ansy I think that
would be a great a greattakeaway for for the folks that
are asking a lot of thosequestions just to make sure
we're conscious of our, timehere today.
(43:15):
So let's talk a little bit aboutthis form.
10 99 k.
Rich Kane (43:20):
Okay, so the 1099 K is reported from a, like a
processor, and you've got, andthere were some examples, Zelle,
now I've corrected mypronunciation, is not included
in the 1099 K.
So it's your responsibility toany Zelle payments to you for
(43:42):
you to issue the 1099 NEC.
The 1099 K has got.
credit cards, debit cards,Square, Stripe, PayPal, Venmo.
But I know that there's an,instance when I, should explain
this, where it's not included inthe 1099k.
And I'm going to use Matt as my,good guy today.
(44:03):
Let's just say for Matt, I say,Matt, build me and I'm going to
pay me and I'm going to pay me.
Hold on.
I'm going to write a check toMatt out.
I'm going to pay Matt and Iwrite a check.
I'm going to pay Matt.
And Matt says, send it to myPayPal account.
What's the PayPal?
And he says, Matt Fulton.
(44:25):
Okay.
So if it's not a businessaccount.
It's not going to go through theprocessing for a 1099 K if Matt
said pay Parkway set up, as abusiness, it will be processed
and he will get the money on a1099 K.
(44:46):
But if he does it because it'shis personal, that will not be
on the 1099 K because it's goingto his personal account.
Paypal or his personal Venmo?
All right, Nancy.
What are you thinking?
Nancy McClelland (45:01):
I wasn't listening to you.
I was putting that link inWebinar chat like Dan just asked
me to do I have no idea what youjust said, right?
So let's keep moving.
You have to be well, I
Dan DeLong (45:12):
think this is what the government is trying to Get
to right is the people that areto skirt the issue of hey pay me
this way So it's not necessarilyYou Needing to be reported.
And as we're seeing like thelowering of thresholds and those
types of things to be onlinewith, The 1099 NEC form, I think
(45:38):
that's where things, thetattling is going to get.
Nancy McClelland (45:43):
Yeah, which makes our jobs harder because I
was talking about reconcilingthat 10 a nine K against the
revenue that is in your, that ison your profit and loss is,
really challenging.
And before it was 200transactions and.
20, 000 before you were going tobe receiving a 1099 K and now it
is only 5000.
(46:03):
Next year is going to be 2500.
Then it's going to go down to600.
So we are going to be seeing alot more issues here.
This is the slide that Dan wasreferencing earlier when he was
talking about when you havequestions where you're like,
that trick question slide, thatpoll that we had, where it turns
out not all of them areaddressed one way or another,
(46:26):
there are lots of questionslike, Melio, I don't know, I go
into 1099problems.
io.
I don't remember how much itcosts, but it is not
inexpensive.
I think it's a very funny dollaramount for the subscription.
It's I don't know, 10.
99 or something like cute likethat.
Dan DeLong (46:42):
That would be cute.
Yes.
Nancy McClelland (46:43):
Yeah, I don't remember the exact amount.
But it is, a very affordableresource.
And to my knowledge, this is theonly resource out there that
actually lists all of thedifferent methods and answers
your questions about that.
But once you know the method.
Rich has got your answers abouthow to handle that in QBO.
Rich Kane (47:07):
If you're in QuickBooks, both desktop and
online, and you're looking atyour checking account, if in the
check field down below in thelower right corner there, all
those little num, acronyms youput in the check number field,
it will exclude it from going ona 1099 NEC.
(47:30):
And that's in both, that's inboth versions.
So any of those words, like youwere, you wrote debit, anything
close.
Exactly.
You have to have exactly these,but you can tell, then it will
not go on the 1099 NECs.
Dan DeLong (47:48):
What, is mb is that
Rich Kane (47:52):
Not mb Mond?
That I can tell.
Yeah
Dan DeLong (47:55):
If you're paying mb Mary Beth Rami then she gets
excluded.
Is that, but they card typocould be Mc it might be, might
have been a typo for, yeah.
Should be for M mc, forMasterCard.
Could be, is Master
Nancy McClelland (48:10):
C?
Yeah.
I dunno.
I'll say that, that I, ran thislist by Alicia Katz Pollock,
who?
At this very moment in time isactually teaching her 1099
session through royal wise andshe said that there are a few
codes missing on this one, rich.
So I want to send you, I justfound this out very late last
(48:31):
night.
So I'm, publishing her list inthe and, you know what, you're
right, Dan it's a, typo.
It's actually MC.
You are correct.
I just put this list in.
The chat that she gave me.
They were pretty close
Dan DeLong (48:46):
On the, keyboard too.
On the
Nancy McClelland (48:47):
keyboard.
Yeah.
So I do, want to recommend thateverybody if you are doing, if
you're doing 1099s inQuickBooks, take her class, I
think it's just a one hour longclass and it's I don't know, 37
or so it's super cheap.
And if I were doing them, if Iwere using QuickBooks online, I
would totally take that classbecause she gives you all sorts
(49:09):
of tips on that.
And this is one of those gems.
Rich Kane (49:13):
Okay.
All
Dan DeLong (49:15):
right.
What happens when you don't dothis?
Rich Kane (49:18):
There you go.
Those are our due dates.
And you can see that you,you're, you will, you could get
fined.
Now, I'm being honest as anaccountant, in all my years,
I've never seen them come backat me against not filing a 1099.
You could file it late and it's,this is really great slide.
It gives you the due dates andyou don't get a penalty.
(49:41):
I've not seen any penalties forfiling late, but I really want
to.
And Nancy did a superb job is ifyou don't know there's a
question on the tax return thatasks you about 1099s and this is
absolutely phenomenal and shecircled it.
Thank
Nancy McClelland (49:55):
you.
Rich Kane (49:56):
And if you can.
If you're, yeah, I just wantedto highlight that
Nancy McClelland (50:00):
technically, if you look at that middle line,
like there are penalties forfiling them late but I, and I
have been doing this for 23years on my own and for many
years before that and I haveseen the occasional penalty come
through, but I'm mostly alignedwith rich on this one.
I rarely see.
I rarely see the penalties aslong as you're willing to comply
(50:22):
eventually.
It is better to file late thannot at all and the situation
that we have that happens semiregularly is you have a client
who maybe they don't come to youuntil extension season.
It's September or October andyou're filing that return and
they have not prepared their1099s yet or they sent out a
couple but then it turns outonce their books are caught up
(50:42):
that you find you found a fewmore that need to be issued.
You can.
As, a, tax preparer, you're notallowed to mark yes on this if
you know that they have notfiled all their 1099s.
But the question is, did you orwill you?
Not, did you?
And, so you can mark yes if youare like, hey, I'm going to go
(51:04):
ahead and mark yes, get thisfiled.
And then October, November,whenever you get that, you take
care of that 1099 for them, thenyou are allowed to check yes on
that.
Rich Kane (51:13):
Now, the interesting thing is you have a client that
hems and haws I don't want togive them a 1099, show them, you
have to put it on the taxreturn.
This is then it sways.
There
Nancy McClelland (51:24):
are the occasional client that
absolutely refuses and we markno, we say yes, you made
payments that would require youto file Form 1099 and then on
line J, no, you did not file therequired Form 1099.
It's just hey, come on at me,please.
Rich Kane (51:43):
Now I know we're raising that red
Dan DeLong (51:44):
flag.
Rich Kane (51:45):
We're short on time here.
I'll just
Nancy McClelland (51:48):
briefly cover this one.
We don't need to go through thewhole thing.
I'm just gonna, this is theslide for the people in chat who
were asking about it.
IRS 10 matching.
This is what this slide isabout.
This is if the name and the taxID number on that 1099 do not
match the way that the IRS hasyou in there.
So for example, if it's yourpersonal name with your EIN or
(52:10):
your business name with yoursocial security number, and it
doesn't match, they will sendthe issuer these nasty, scary
letters.
They can be ignored if theperson is on the up and up, and
it was simply just a yes,they're reporting it.
So we're good there.
Rich Kane (52:25):
And then the only
Nancy McClelland (52:25):
I also Sorry, go ahead.
Rich Kane (52:27):
Yeah, I want to cover before we lose some time a
little bit and talk abouttiming.
And I think it's importantbecause you could get a tax
notice and I'm going to use Mattas my scapegoat again.
I bill Matt for some services Idid and I send him the bill in
the middle of December.
Matt looks his, it is P and Llike the end of the December
(52:48):
31st.
He says, you know what, I needsome more expenses.
So I'm going to send Rich Let'ssay Richard check, okay, it goes
into his system and his systemis going to process a 1099 for
me as of 2024.
He's going to tattle to the IRS.
They're going to expect to seeit.
But I don't get the check fromhim until the first week of
(53:11):
January and I'm a cash basispayer.
I'm going to deposit it in andgoing into 25.
But when I do the return.
It's already in my transcriptthat it was for 24 and I will
get a notice that says youdidn't declare this on your tax
return.
Here's some additional tax foryou.
So you got to understand thetiming of it.
(53:33):
But that's okay.
Nancy McClelland (53:34):
You just write back.
It's okay.
You get that notice and then youwrite back to the IRS.
And you said, that's because Ididn't constructive, didn't get
constructive receipt of it untilthe following year.
It will be in the followingyear.
And then the IRS says that's,fine.
But so you can get notices thatIt's okay to get a notice.
You just need to be able torespond to it.
Matthew Fulton (53:51):
I think the point though is yes, you can get
those notices.
Every notice you receive isadditional time.
You have to spend on somethingand it's more mental power, all
that stuff.
So if you recognize how thoseline up and especially if you
have good partners in businessthat you can address it with
them ahead of time, it's goingto help everybody all the way
around.
Nancy McClelland (54:09):
Fabulous point spot.
Dan DeLong (54:12):
All right.
So let's talk about in the lastfive minutes that we have, we
may run a little over.
If you're fine to stay, great.
If not, you got to go.
That's totally fine, too.
But let's talk about some of thegreat workflow habits.
And you were mentioning this,Nancy, a little bit ahead of
time.
That adding this to yourworkflows, not at November, not
(54:35):
at tomorrow, actually is a goodway to make sure that you're
ready for this, month of hellthat we have for 1099, right?
Nancy McClelland (54:46):
Yes, absolutely.
So I, I love Keeper.
I'll try to go through thisreally quickly.
They have in their, system,they've got a process.
If you want to go to the nextslide, identify, request,
update, export, identify whathappens is because Keeper syncs
with QuickBooks online.
And you know what, I believesomebody from Keeper, I saw them
(55:06):
in the chat.
Laura is here.
So if you have questions, pleasegrab her.
But yeah, Identify Lauren, thankyou for being here.
Hi.
So, the way that it works is itlooks at the fact that you
created a new vendor.
It says, Oh my gosh, Hey, youmight have, this person might be
a 1099 vendor.
(55:27):
And you just mark yes or no.
This is that screenshot.
Yes, we need potentially need a1099 from them.
No, we don't.
Do we have a W9 on file or not?
All of this stuff.
Get pops up and it asks youthese questions and then you can
go in and look at it and takecare of it.
Go ahead to the next one andthen request an update.
The request is what I wasmentioning earlier where you
(55:48):
actually can request that W 9.
Through Keeper, this is forpeople who, have decided to
spend the eight or ten dollars amonth per client on Keeper, this
is, and they're only using onepiece of it, this is usually the
reason, being able to request W9s directly from You're welcome.
(56:08):
Get that client out of the way,request them directly from the
vendor and do it electronicallythrough Keeper.
And it syncs back to QBO.
It's beautiful.
We love it so, much.
And I have heard that a lot ofpeople have actually gotten new
clients because the vendor getsthis request and they go, Wow,
this bookkeeper's way moretogether than me trying to do it
on my own.
Or than that like Joker CPA overthere who only looks at stuff
(56:31):
once a year.
Yeah, no.
Say reach out to them and say,Hey, are you taking new clients?
So it's a really great featureand then that vendor update is
it's actually Syncing back toQuickBooks online or zero if
you're using it.
Next slide, please And then atthe end of the year and they
just implemented this last yearThis is only the second year
(56:52):
they're doing it and it'sbeautiful You then get all of
that 1099 related data in yourpreferred file format, whether
it's CSV track 1099 or text 1099and you export it.
And then you import that fileinto your program in our case,
track 1099.
And it is actually seamless andbeautiful.
I never, when people talk aboutan integration, I always go it
(57:16):
doesn't integrate, but it is anexport and import to clarify,
but it is beautiful, seamless,it's easy, and it has changed
our lives.
Dan DeLong (57:27):
And then there's options inside of QuickBooks.
If you are using QuickBooksonline there is a new new
automated way, which willsupposedly in theory, do all of
this stuff for you.
But how well do we rely on themachines to, to do all the
(57:48):
things that we need to domanually?
It's supposed to identify whoneeds a 1099 by looking at All
of those things, but again,garbage in garbage out.
So if you're not entering thingsin properly, I wouldn't expect
the machines to make thosecorrections for you to do that,
but it's supposed to automatethe form completion, email and
(58:10):
mail to recipients and track andmanage all of that
Nancy McClelland (58:13):
for a small fee of 14
Dan DeLong (58:16):
per form.
Nancy McClelland (58:17):
14 per form.
Interesting.
I don't know if you got my emaillate last night.
I saw a post on the, yourcommunity on the QB Power user,
QB Power user community.
Which is that the 1099transaction detail report,
(58:38):
several of their 1099 vendorswere missing from the report.
And they called support andsaid, it's a, known issue.
What did you call that?
Dan DeLong (58:46):
The undocumented program feature.
Nancy McClelland (58:49):
It's an undocumented program feature.
So be careful if you're usingQBO and review those lists and
make sure that they're correct.
Dan DeLong (58:58):
So knowing that maybe not a great plug for the
new automated 1099, if there's aknown features.
Known on, Undocumented features,because there still is the
manual processing of 1099s inQBO, which was the old way of
doing things where you wentthrough the wizard or make sure
(59:20):
your mappings were correct.
The thing to keep in mind isthat most Intuit services like
QBO payroll, contractors and QBObill pay include the fees,
right?
So you don't have to pay theform filing fees.
For that, if you are using thoseservices, so just bear that in
mind.
(59:40):
Especially since if they havethis or any of these services
where they are, alreadyincluded, the, filing fees are
done for you, so if you're goingto manage this anyway, by going
through and running thosereports and doing those things,
which may or may not be accuratenow that we've had that tidbit
(01:00:03):
from, Nancy, Just keep in mindthat those things might be
included and I've included linksto the demos and videos and if
you go to our landing page Blogfor this session.
We've got all that on the QBpower our Website and the tip of
the hat to desktop, which ismore and more complicated As,
(01:00:28):
the use go on, it's not
Rich Kane (01:00:29):
easy like it used to be,
Dan DeLong (01:00:31):
right?
You do add a tax 10 99 plugin,or you use the QuickBooks web
connector to synchronize thatfrom QuickBooks desktop to to
tax 10 99.
So if you are using tax 10 99,you can use it with Keeper.
You can use it with QuickBooksDesktop, and then you can use it
with QuickBooks Online if you'reusing it with, with keeper.
(01:00:56):
The link for that as well.
So our last polling question is,did you find this useful?
And there's a two part, yeah,did you learn something new?
I think that's that's.
Nancy McClelland (01:01:10):
Oops, we've still got Avalara in there.
I think that's from the early,December.
Dan DeLong (01:01:15):
That's last year.
Wait a minute.
Nancy McClelland (01:01:17):
Yeah, that was last month.
That's okay.
Substitute already using,instead of Avalara, substitute
either Keeper or QuickBooksOnline or Track 1099 or 1099.
Are you already using something?
I, hope that if you took onething away, it was that this
really should be a year roundprocess because it makes it so
(01:01:40):
that January isn't as hellish.
We all know 1099s.
Suck.
But as Diamond likes to say,friends don't let friends waste
time on 1099s.
So there are ways to make thisbetter.
There are a lot of resources outthere.
I'm going to dump a bunch ofthese in the chat.
Again, we've got my MSN articleon 1099s, which goes through
(01:02:01):
lots of 1099s in addition.
To the NAC and the K.
There is an earmark gig that Idid with Diamond and Keeper last
month on how to integrate 1099Management into your monthly
workflow.
There is the Keeper Prepare1099's Help Center and Diamond's
1099 Payment Method Guide.
(01:02:22):
I am also going to toss some ofmy info on Ask a CPA in there
because, Diamond is actuallygoing to join me in one hour to
do and ask me anything about1099s in ask a CPA.
And if you sign up before thenyou can go into our circle
(01:02:46):
community and, get on it.
We'll see you in an hour.
And I think Dan you, actuallyhave a a promo code for joining.
Dan DeLong (01:02:56):
Yeah there's a, promo code for our, listeners
for for, Nancy's group for 30percent off for three months.
It's on our on our landing pagethere for you.
So it can just go there for thehandouts or the replay or
anything.
You can get the promo code fromthere.
And then also in the handoutsthemselves, we do have an
(01:03:18):
appendix, that doesn't get anappendectomy, right?
So there's some frequently askedquestions and a Q& A in there.
So if you download the, Andthose are from all of the,
Nancy McClelland (01:03:34):
I've done like a ton of these 1099 talks
before, and I get a lot ofquestions and I try to go back
and answer the questionsafterwards.
And that's what all of theseFAQs are from.
Dan DeLong (01:03:47):
Rich, Nancy Matthew always great to see you.
We really appreciate Nancy andRich coming together for for
this fighting, dueling CPAs, and1099 discussion.
Any closing remarks or thoughtsfrom either of you two?
Nancy McClelland (01:04:08):
I'm just so glad that you're providing this
resource for people because it'strue.
1099s shouldn't be this hard,but.
They really are and you needresources and you need education
and it's just so wonderful thatDan, that you and Spot are
providing this space to invitefolks like Rich and I, who've
seen, we've seen a few 1099Seasons in our time.
Rich Kane (01:04:32):
Great.
Yeah, we had a bunch of tipshere.
So at least we've gotten someeducation out and I feel better
about that.
Dan DeLong (01:04:42):
Do those tips need to be reported on the 10 99?
Yeah.
Funny.
Rich Kane (01:04:46):
You
Dan DeLong (01:04:47):
a funny guy there, guy
Nancy McClelland (01:04:48):
Dan.
I'm getting some comments in thechat that the it, there's a save
30% off ask a CPA link on the onyour thing, but it just goes to
my website and there's no promocode listed.
I do not remember what thatpromo code is.
I'll add
Dan DeLong (01:05:05):
it and put it there.
Fronto, as soon as we close outthe session here today.
Nancy McClelland (01:05:12):
All right.
I'm going to take a quick lookfor those of you who are still
on the call and are desperate toknow the answer.
Give me just a moment herebecause I can pull it up from
one of these emails.
Okay, but the discount code.
Oh, it's really straightforward.
QBPH 30.
QBPH 30.
(01:05:33):
So that's QuickBooks Power Hour.
30 QB PH 30.
There it is.
So for anybody who would like tosign up, you get 30 percent off
the first three months.
And for any of you who sign upin the next hour, we will see
you soon.
I also saw a lot of ask the CPAmembers in the chat, so I can't
wait to see you guys later.
Thank you so much.
Dan DeLong (01:05:51):
All right.
We appreciate you joining us.
Nancy McClelland (01:05:53):
Wonderful day.
Dan DeLong (01:05:55):
Likewise, and next time we're going to be talking
about copy QuickBooks onlinedata.
So hopefully you join us on thenext QB Power Hour for how to
copy QuickBooks online data fromone file to the other or import,
export.
So it should be a good,
Nancy McClelland (01:06:12):
I'll be there for that.
Matthew Fulton (01:06:13):
The only thing more complicated than 1099s.
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