Set Up and Pay a 1099 Contractor

1. Open the Maintain Vendors window.
2. Enter the vendor contact information.
3. Be sure and make a selection in the field "1099 Type".
4. Select Ind. Contractor for independent contractors that you have to send a 1099 to.
5. Select Interest if this vendor should receive a 1099-INT at the end of the year.
6. Select None if the vendor does not get a 1099.

Note: If you leave this field set to None, Sage 50 will not print a 1099 for the vendor. However, if you inadvertently left the field set to None, you can change it to Ind. Contractor or Interest and Sage 50 will still be able to accurately report their 1099 wages.

7. Note the Expense Account that you enter or select. You will need to remember it in the next step.
8. Save the vendor record.

You need to make sure that the Expense Account you entered on the vendor record is configured to print in the right box on the contractor's 1099 form.

1. Open the Vendor Defaults window.
2. Click on the 1099 Settings tab.
3. Scroll to find the Expense Account you entered on the Vendor record.
4. In the 1099 Settings column, click on the dropdown list to select the box for this account.

INT Box 1 or MISC Box 7: This is the default setting for all general ledger accounts. It allows the calculation of contractor payments to be based on the 1099 type you have set up for each contractor in Maintain Vendors (either Independent Contractor or Interest).

1099-INT, Box 1: Select this to report interest income for each contractor you have paid at least $10 in interest as a loan. Sage 50 will then make interest income calculations for all contractor payments credited to the chosen general ledger account.

1099-MISC, Box 1: Select this to report income for each contractor to whom you pay rent. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 2: Select this to report income for each contractor to whom you pay royalties. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 3: Select this to report income for each contractor to whom you make other, unspecified payments. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 5: Select this to report income for each contractor you pay in the form of fishing boat proceeds. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 6: Select this to report income for each contractor you pay in the form of medical and health care payments. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 7: Select this to report miscellaneous income for each contractor you pay more than $600 annually. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 8: Select this to report income for each contractor who receives substitute payments in lieu of dividends or interest. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 9: Select this to report income for each contractor you pay in the form of direct purchase of $5,000 or more in consumer products that you intend for resale. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 10: Select this to report income for each contractor you pay in the form of proceeds from crop insurance. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 13: Select this to report income for each contractor who has received excess golden parachute payments from your company. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

1099-MISC, Box 14: Select this to report income in the form of gross proceeds paid to an attorney. Sage 50 will then make miscellaneous income calculations for all contractor payments credited to the chosen General Ledger account.

None: Select this option if you don't want either miscellaneous income or interest income calculations to be made for the chosen general ledger account.

1. Select either Payments or Write a Check.
2. Click on the lookup icon and select the contractor.

3. Enter the payment information and save the check.

   Note: It's important to choose the correct payment method when you enter a payment to a 1099 vendor. Why?

1. From the Reports and Forms menu, select Forms, then Tax Forms.
2. On the Select a Report or Form window, double-click on the form to print in the Forms list.
3. Set your options and click Print/Email to print.