Today we will discuss the topic of how you can set up contractors and track the payments you make to them for 1099s. QuickBooks online allows you to add your contractors as vendors or customers. QuickBooks will automatically track all of the related payments so whenever you want to file their 1099s, you must have all of their essential details. Now let us see how you can set up contractors for each of the products.
Know who needs 1099
All of that non-employee to whom you have been paying $600 or more than that in a given year whether it is cash or electronic payments. They must need to file 1099s, the payment method may be cash, credit card, don’t count, or any other electronic method.
We recommend you to before starting with 1099s, you should check the IRS guidelines, so you have a clear vision of whom you have to file 1099s for. However, the 1099 E-File Service only supports the contractors having addresses in the United States.
Tell your contractors to fill out a W-9 forms
Before starting with the contractor tracking, we suggest you get your contractors to fill out a W-9 form. This gets the details you require to make the set up faster and easier. You can even download the forms of W-9 directly from the IRS.
How to set up a contractor in Quickbooks Online
Firstly, add a contractor as a vendor
In case you have not done this already, add the contractor as a vendor in QuickBooks Online:
- Open the Payroll menu, then click on the Contractors option.
- Click on the option to Add a contractor
- Fill out the details of your contractor or mark the checkbox of the option Email this contractor so that they can fill it out.
- Once you have filled and done with the details, click on the option to Add contractor.
Then track the contractor payments for 1099s
As of now, you have added your contractor and entered the contractor as a vendor, then you can now able to start tracking their payments.
- Open the Expenses menu and go to the Vendor section.
- Choose the vendor you have to track and then open their profile.
- Hit on the option to Edit.
- Choose and mark the checkbox of Track payments for 1099.
QuickBooks will automatically start tracking each and every payment you made with your vendors or customers. Whenever you are totally ready to file the 1099s, you will be able to normally set up the tracked payments to the form.
A lot of small companies hire short-term or bring on independent contractors to succeed in a project. Correctly bookkeeping for expenses associated with all of their work is quite critical. So here in this condition, you can use QuickBooks online to track the expenses and file 1099s for your independent contractors. It is really very important to follow the above-listed steps in the same order.
That was a quick and easy step on how you can set up contractors and track them for 1099s in QuickBooks Online. For help regarding this blog, please contact our QuickBooks online support team at +1-888-461-1336.