Disclaimer: It is your responsibility to verify that all generated/printed 1099 information is accurate. Consult with your accountant to ensure you've followed the correct IRS process.
Step 1: Categorize Accounts
First, go to Accounting > 1099s on the left-hand side of dealr.cloud. Then, go to Account Mapping.
Here, you can select the 1099 category for each of your accounts. There's a few important things to note here:
Payment Accounts - Be sure to categorize any payment accounts that need to be reported. Forms of payment that would be reported on a 1099-K, by a third party company such as a Credit Card Processor, should not be included here. Check with your accountant for instructions here.
Sub-Accounts - You must select the account category on every sub-account you need to be categorized. For example, if you are recording Inventory Asset and have sub-accounts for your different cost types, you have to select the category on every sub-account.
Sales/Service Cost of Goods Sold (COGS) Accounts - You must also categorize the parent and sub-accounts of any COGS account that contains costs needing to be reported on the 1099s. When a vehicle is sold or a ticket is closed the funds are transferred from inventory asset into COGS, so just selecting the inventory asset account or COGS account individually isn't enough: you must categorize both!
Categories - For the remaining categories, most funds will go into Non-Employee Compensation for the 2020 tax year, but you should check with your accountant to confirm.
Step 2: Verify 1099 Info
You need to go into your General Settings to confirm that all of your business' information is recorded accurately. Your name, address, and federal tax ID listed in your General Settings will all be printed on the 1099 forms.
Next, you should verify your vendors' details on the 1099 Vendors page. Each vendor should have a name, address, and federal tax ID. You can scroll through the list to verify all of the information is present. Here you can view transactions for each vendor, edit their information, and on the right-hand side, you can verify the 1099 totals.
Step 3: Print
The three forms that need to be printed on special paper for the IRS and are mailed directly to the IRS are the 1099-NEC, 1099-MISC, and a 1096 summary for each. In step 4 we show you how you can instead download the forms in order to upload to a third party for transmission if you don't want to print the documents.
Be sure you DO NOT print these on plain paper!
You need to purchase pre-printed forms specifically for sending to the IRS!
You'll want to buy some laser forms to print. Below are links to some forms that should work for the process: Note, you'll want to print the Copy A version for each of the forms that come with the package since they are pre-printed forms.
The next step of the process is to align the forms. You can either do this with a plain sheet of paper or using the pre-printed forms you purchased directly. Click the printer icon next to the form you want to print, and then click Align Form.
You'll see a dialog pop up that looks like the image below. First, print the alignment marks. Then, click and drag the marks on the screen to make the screen match the printed marks.
If using a plain sheet of paper, hold the pre-printed form and the plain paper alignment marks up to the light to see the positioning.
Load up the forms into your printer (ensure you've oriented it properly), click the print icon, and print it!
This form needs to be printed for each 1099 form you're sending. So, one for the 1099-NEC and one for the 1099-MISC. You'll be prompted to select the type when you click the print icon on this form.
Get with your accountant or consult the IRS website on how to send the forms to the IRS!
Step 4: Electronic Transmittal (Optional)
If you want to use a third-party 1099 service to file these documents, we have a function that allows you to download a spreadsheet so you can customize the format for upload.
Note: This may require advanced spreadsheet knowledge and manipulation; we can't provide any assistance for these services or formatting the spreadsheet because each provider is different and has different requirements. Reach out to the provider to determine their requirements. Below are links to some of these providers.
To download the spreadsheets, go to the Spreadsheet tab and download the appropriate file.