This article deals with utilizing the popular QuickBooks “Expenses by Vendor Summary” report to help ascertain which vendors might be a candidate to process the annual 1099-NEC form for.

Typically, when you utilize QuickBooks to help with processing 1099 forms, you probably utilize the 1099 wizard or some other 1099 candidates related report to accomplish this annual task.

However, if you want to utilize a different way only to find out which vendors might be a 1099 recipient candidate based on what you paid to them for the entire calendar year, you can begin by processing the “Expenses by Vendor Summary” report to assist with this.

This report can be especially helpful if you do NOT plan on utilizing the QuickBooks 1099 software and instead only want a spreadsheet report so you can manually accomplish this task utilizing a 3^rd party 1099 software instead. This report is super helpful if you are NOT directly integrating your QuickBooks Online data with another 3^rd party software as well.

When you do process the “Expenses by Vendor Summary” report, be careful as the data in here can be NOT entirely representative of what may constitute a vendor candidate for 1099 purposes. So, some things to keep an eye out for to ensure this report is helpful for you here are the following:

• Capitalized Expenses – these expenses are put into an asset type of balance sheet account and thus will NOT show on this report. Remember, this report is for “Expenses” only and not capitalized events.
• Payments Types – all payments types, including credit cards and other 3^rd party payment processors that may issue their own 1099-K forms, will be listed on this report. So it is in your best interest to exclude payments types not relevant for your 1099-NEC reporting needs.
• Cash Based Accounting Method – make sure your vendor expense reports are Cash-Based and not Accrual-Based.
• Reporting Thresholds – be sure you understand the latest IRS reporting thresholds for your 1099 reporting needs. Typically, it is $600 for the 1099-NEC form.
• Materials, Labor, Reimbursements – you do NOT need to send a 1099 form to a vendor whom you ONLY purchased materials from during the year. Also, you may want to consider whether to include paid reimbursements to vendors on their 1099-NEC forms.
• Obvious Exclusions – some vendors listed on your Expenses by Vendor Summary report probably can be obviously excluded from a 1099 form from you. Examples can be banks, department stores, restaurants, online retailers and government agencies.

Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.