Using Vendor Records for 1099 Contractors in NetSuite
For each contractor or non-employee that is paid more than $600 for services during the calendar year, you must provide a Form 1099-MISC Miscellaneous Income statement for reporting tax information. Each contractor that requires a 1099-MISC form must be identified as a 1099 contractor on his or her vendor record in order to generate accurate 1099 information. In order for vendor payments to accrue on the 1099-MISC form, you must do the following:
Each 1099-MISC category represents a box on the 1099-MISC form. You can associate one category per expense or other expense account, and you can associate the same category to more than one account.
To make a vendor 1099 eligible:
To associate 1099-MISC categories with expense accounts:
When you enter a vendor bill, select the expense account associated with the 1099-MISC category that matches the type of payment. When you pay the bill, the expense amount appears on the 1099-MISC form in the box represented by the 1099-MISC category.For example, you enter a vendor bill for a 1099-eligible vendor. On the Expenses sub-tab, you select an expense account that is associated with the Box 7 – Nonemployee Compensation category. The threshold for Box 7 is $600. You enter $700 as the amount paid to the vendor, and click Add to attach the expense. Because the amount paid exceeds the threshold, the entire $700 will show in Box 7 of the 1099-MISC form for that vendor once the bill has been paid.