1099s — filing them yourself

Every January you have to send a 1099 to certain vendors and file a copy with the IRS. The Ledger's 1099 Payments report tells you who those vendors are, what you paid them, and — the part that actually costs people money — which ones you can't file for yet.

Open it at Admin → Ledger → Payments, then the small 1099 link on the right of that row. It sits there because it is another view of the same vendor payments — with the differences that matter for filing (see below).

Who needs a 1099

You generally send a 1099-NEC to anyone you paid $600 or more during the calendar year for services, when they're not a corporation: individuals, sole proprietors, partnerships, and most LLCs. Contract labour, a bookkeeper, a plumber, a consultant.

Rent is different: rent paid to a partnership or a corporation goes on a 1099-MISC instead. Same $600 floor, different form.

You generally don't send one for merchandise (plants, hard goods, anything you resell), or to a corporation, or to an employee — employees get a W-2.

If you're unsure about a specific vendor, ask your accountant. The report will happily show you the numbers either way; whether a form is required is a tax question, not a software one.

Mark your 1099 vendors

On the vendor's own page (Vendors → [vendor]) you'll find three fields:

• Send this vendor a 1099 — the checkbox that puts them on the report
• Tax ID (1099) — nine digits, from the vendor's W-9: an EIN like 12-3456789 or an SSN like 123-45-6789
• 1099 form — 1099-NEC for services (the default) or 1099-MISC for rent

These fields only appear for users with the GL permission, because a sole proprietor's tax ID is their Social Security number. If you can't see them, that's why.

You can mark vendors any time. The report reads the flag when you run it, so a vendor you flag in December still shows their full year of payments.

Run the report

1. Pick the Calendar year. 1099s are always filed on the calendar year, even if your fiscal year starts somewhere else — so this picker is deliberately not a fiscal-year picker.
2. Click Run.

The report splits vendors into three groups, because they're three different jobs:

Ready to file — paid $600 or more, with a valid tax ID, a name, and an address. Nothing left to do but file.

Reportable — but not filable yet — paid $600 or more, but something's missing. The Status column says what. Almost always it's the tax ID, and the fix is to request a Form W-9 from the vendor. Do this in the autumn, not in January — W-9s come back slowly, and a vendor you can't reach in the last week of January is a penalty.

Under $600 — no form required — hidden by default. Tick Show vendors under $600 to see them. Worth a look once a year: a vendor sitting at $580 is one invoice away from needing a form next year.

Click the Payments count on any row to see the Journal filtered to that vendor and year — every payment behind the total.

What counts as a payment

The report measures cash paid during the year, not what you were billed. A bill dated in December but paid in January belongs to January's 1099, and that's how the report reads it.

By default it counts payments from your bank accounts only. Credit-card payments are deliberately excluded: the IRS treats those as reportable by the card processor on a 1099-K, so putting them on your 1099 as well reports the vendor's income twice.

The Payment accounts box lets you change which accounts count. If you tick a credit-card account the report shows a red warning, because that's a decision to make with your accountant, not by accident.

Refunds and voided checks reduce the year's total rather than being ignored, so a vendor you paid $1,000 and who refunded $500 shows $500.

Tax IDs are masked

Everywhere the report displays a tax ID it shows only the last four digits — ***-**-6789. That includes the printed report and the Export CSV file.

The one place a full tax ID appears is the Download filing data button, which is the file you hand to your filing service. It only appears when at least one vendor is ready to file, and only for users with the GL permission.

Filing

VMX gives you the data; a filing service transmits it. Services like Tax1099 and Track1099 hold the IRS transmitter credentials on your behalf, accept a spreadsheet of recipients, mail the vendor copies, and file with the IRS — for a few dollars a form, which is well under what most accountants charge to do the same thing.

Download filing data produces a CSV with one row per recipient: form type, box, name, tax ID, address, amount, your business name as payer, and the tax year. Upload that to your filing service and map the columns.

A note on paper: if you're filing 10 or more information returns in total (1099s, W-2s and 1098s combined), the IRS requires electronic filing. Most stores with a handful of 1099 vendors are over that line once W-2s are counted, so paper usually isn't an option.

Before you file, check the total

Run Admin → Ledger → Reports → Journal filtered to a 1099 vendor for the year and confirm the payments look right — particularly that nothing was paid from an account you didn't expect. It takes a minute per vendor and it's much cheaper than filing a corrected 1099.