Most of the 1099 process in Sage 50 is pretty straight forward. Record your payments throughout the year, set the “1099 Type” field to Independent Contractor for any vendor that should get a 1099-Misc, and print your forms at the end of the year. But how do you adjust the 1099 amount when needed? Or what if you gave a non-cash award or prize worth $600 or more – how would you get Sage 50 to print a 1099 for someone you didn’t even make a payment to? It’s actually easier than you might think.

First, if your not familiar with the basic process for issuing 1099s from Sage 50, read this overview. You’ll still need to follow that same process. If you gave out non-cash prizes, make sure each recipient¬† is set up each as a vendor.

The only transactions Sage 50 includes on 1099s are payments to vendors (cash disbursements). So any adjustments to the 1099 amounts have to be done using a payment, but of course you need to do it in a way that doesn’t change your general ledger balances or interfere with your bank reconciliation.

  • Go to the Tasks menu and choose Payments.
  • Enter the ID for the vendor
  • Enter a check/reference number such as “1099Adj”
  • Enter a date in that is within the 1099 year. I usually use Dec 31.
  • On the Apply to Expenses tab enter a description, a GL account, and the amount. The GL account should be an expense account. But the exact account you choose isn’t particularly important since the balance won’t change. If you need to reduce the amount of someone’s 1099, you can enter a negative amount.
  • Now go back to the Cash Account field and change it to the account you used in the GL Account field. This will cause the debit and credit to go to the same account so the net effect will be 0. And it will keep the activity off of your bank reconciliation.

Even though you’ve debited and credited the same account, the 1099 will only be affected by the amount on the Apply to Expenses tab. You can run the 1099 Vendor Report (Reports & Forms > Accounts Payable) to review the new 1099 amounts before printing your 1099s.

WARNING – the Payments window remembers that last setting for the Cash Account. So to prevent accidentally entering payments to an expense account instead of your bank account, it’s a good idea to open a normal payment and re-save it after entering your 1099 adjustments.