Using Vendor Records for 1099 Contractors in NetSuite

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:

  1. Go to Lists > Relationships > Vendors
  2. Click Edit next to the vendor that should be 1099 eligible
  3. On the vendor record, click the Financial sub-tab
  4. Under Tax Information, check the 1099 Eligible box
  5. Click Save

To associate 1099-MISC categories with expense accounts:

  1. Go to Setup > Accounting > Manage G/L > Chart of Accounts
  2. To create a new expense account, click New. Otherwise, click Edit next to the expense account you want to associate with a 1099-MISC category
  3. If you are creating a new account select Expense or Other Expense in the Type field to enable the 1099-MISC Category field
  4. In the 1099-MISC Category field select the type of vendor payment made with this account. These categories correspond to the boxes on the 1099-MISC form and cannot be added to or deleted
  5. You can view and change the threshold amounts for each category at Setup > Accounting > Accounting Lists. Select 1099-MISC Category in the Type filter.An amount for a category is not reported on the 1099-MISC form until the threshold for that category is met. Once the amount per vendor is greater than or equal to the threshold amount, he total amount is shown on the form
  6. Click Save

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.