Payments made to a vendor by credit card must be excluded from their 1099, because the card provider reports them separately on a 1099-K. Legal Accounting includes all payments by default, so the credit card portion has to be deducted before the form is finalized.

This article explains how. 

Note: This applies to firms using US books only.

Why credit card payments are excluded 

The IRS requires card payments to be reported by the payment settlement entity, not by your firm. Including them on your 1099 would double-report the vendor's income. 

Excluding the Payments 

Before you begin:

• Know the total paid to the vendor by credit card during the year.
• Do this before finalizing the 1099. Once finalized, the form is generated.

To do this task:

1. Continue entering and paying vendor invoices as normal throughout the year.
2. Before finalizing the 1099, open the vendor's contact record.
3. In the vendor information, enter the total paid by credit card as a negative amount.
4. Finalize the 1099. The reported total now excludes the card payments. 

Worked Example

A vendor was paid $700 during the year, of which $300 was paid by credit card.

• Enter -$300 against the vendor record.
• The 1099 reports $400.

If the entire amount was paid by credit card, entering the full amount as a negative reduces the reportable total to zero.

Updated October 09, 2026 22:45