Question

How can I get vendors paid with a credit card to show up on the 1099 summary?

Forum|Forum|6 years ago
January 22, 2020
3 replies
26 views

No text available

QuickBooks Enterprise Suite

J

Joshua R

Good afternoon, @accountspayable2

Glad to have you in the Community!

I'll give you some insight into the 1099 summary.

For the payments not showing, there may be a few explanations. It should only be disclosed to vendors you paid through cash or check, and only if the payments exceed $600 or more. (It is up to you to say something inferior to this). It will be missed if you entered, e.g. a request for payment but used DBT or Paypal as the check number. For more detailed information, please see the article below.

Vendor missing from 1099 Summary Report or 1099 E-file Service

You should also check the mapping on your accounts. Unless the account that you used isn't marked when you entered the bill or paid the vendor, no payments will be shown. See File and register 1099s using QuickBooks Desktop.

Thanks for reaching out. If you hit any bumps in the road along the way, we're always here to help.

A

ARbooks

Are you saying that 1099 eligible vendors paid by credit card should not get a 1099 Misc? Doubt the IRS will agree with that.

A

AileneA

Moderator

Hello, ARbooks.

I agree with our community champ BigRedConsulting. You can also contact directly to the IRS to confirm about it.

Through this article, you can read about what payments are excluded from a 1099-NEC and 1099-MISC.

Also, you can read through IRS Publication 15 about the employer's tax guidelines.

Please let me know If you have any other questions. I'll be here to assist you anytime. Stay safe!

BigRedConsulting

Level 15

Vendors paid only with a credit card should not receive a 1099, and since credit card data won't be included on the report or the 1099 form, they don't appear.

Do you want them to appear on the report for some other reason?

M

mosestax

Why would they not get a 1099 if paid with a credit card? They are not always paid with a credit card - some of the amounts on one card do not add up to the $600 but over all payments they do?

FishingForAnswers

Level 4

@mosestax Businesses that receive payment via credit card, debit card, and such do so through a merchant service provider. Paypal is a prominent example.

The merchant service provider tallies up all the payments they processed for said business and lists the total, usually by month, on what is called a 1099-K. This form reports said payments to the IRS for income tax reporting purposes, much like a 1099-NEC or 1099-MISC.

Because these payments are already being reported to the IRS on the 1099-K that the merchant service provider prepares, having the business' customer report them to the IRS on a 1099-NEC would be problematic.

As an example, let's say that you do one job in 2024. You are paid $50,000.00 for the job by credit card.

Your merchant service provider would report the $50,000.00 to the IRS on a 1099-K. They do not tell the IRS which company paid you this $50,000.00; just that you were paid that $50,000.00.

The IRS now expects to see the $50,000.00 from this 1099-K on your income taxes.

Let's say that your customer prepares a 1099-NEC for you for the $50,000.00 that they paid you. They send this to the IRS.

The IRS now expects to see the $50,000 1099-NEC on your income taxes.

More to the point, the IRS now expects to see both the $50,000.00 from the 1099-K and the $50,000.00 from the 1099-NEC on your income taxes, or a total of $100,000.00, and for you to pay income tax on that $100,000.00.

You may notice that you did not actually get paid $100,000.00 in 2024.

Do you see the problem?

S

sn90

Hi everyone! We paid a law firm through credit card, and for that reason QBO is NOT pulling the law firm in the 1099 forms. How should I proceed in this case? Do I still need send the law firm the 1099? (maybe outside QBO?)or the credit card company will do.

Thanks in advance!!

Nicole_N

QuickBooks Team

Hey there, @sn90. Thanks for joining the thread. I've got some information you need about fees paid through credit card.

Payments made via credit card, debit card, or third-party system, such as PayPal, are excluded from the 1099-MISC and 1099-NEC calculations. This is because the financial institution reports these payments, so you don't have to.

I suggest contacting the IRS to know what exact form you can submit to the law firm paid by credit card as well as how it's processed.

You can also visit this article to learn more about the boxes on Forms 1099-NEC and 1099-MISC: Understand payment categories for the 1099-MISC and 1099-NEC.

Let me know in the comment below if you have any other questions about 1099s. I'll be here to lend some help. Keep safe and have a good one!

A

almaagu1229

What if we paid a vendor with both credit card and check. Do we omit the credit card payment from 1099 reporting? How can we do this?

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