Legal Accounting accumulates payments made to vendors over the year and produces 1099 forms from them as needed. The process runs across three stages: 1) setting the vendor up correctly, 2) recording and paying their invoices through the year, and 3) finalizing the form at year end. This article covers all three.

Note: 1099 reporting applies to firms using U.S. books only.

Understanding the Active and Finalized views

The 1099 report has two views.

The Active view accumulates invoices toward the 1099 forms for each vendor providing consultation or contractor services, known as nonemployee compensation. The reporting threshold (the minimum amount that triggers a form) is set by the IRS and is currently $600. This can be changed if necessary.

This shows the Active view listing accumulated vendor payments:

This shows invoices and payments recorded against a vendor:

Part 1: Setting Up the Vendor

To do this:

1. Navigate to the Contacts menu and create a New Contact.
2. Enter the vendor information.
3. Open the Vendor Info section and mark the contact as a vendor.
4. Set the 1099 indicator and fill in the information.
5. Click Save.

Part 2: Recording and Paying Vendor Invoices

To record the invoice:

• When the vendor submits an invoice, enter it on the Payable data entry screen.

To pay the invoice:

• In Legal Accounting, use either Operating Out or Batch Pay Payables: 
  • Operating Out: Select the vendor in the Contact field. When the list of outstanding payables is displayed, select the payable you would like to pay.
  • Batch Pay Payables: Release the transaction from the list.

NOTE: Payments made by credit card should be excluded from the 1099, because the card provider issues a 1099-K. See the related article on this.

Part 3: Finalizing the 1099

Typically, you finalize at year end, or once the firm has no further work for the vendor.

To do this:

1. In Legal Accounting, to go Reports > Payables >1099 tab.
2. Click Active to review the vendor's totals for the year.
3. Click the drop-down and select the 1099 view and set your parameters and run the report.
4. Click Finalize (located at the bottom of the 1099 listing).A processing message appears to let you know that a CSV file that can be uploaded to the IRS is stored on your Notification Bell.
5.  Click Close.
   The completed forms are available as a PDF in the Finalized section.
6. If needed, run these steps again to generate 1099 forms for the alternate form type.

Form Types

1099-NEC

1099-MISC

Updated October 07, 2026 15:58