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How to Set up 1099 Employees in QuickBooks Desktop & Online

What are 1099 employees?

1099 employees are referred to as self-employed individualistic contractors. The salary depends upon their contract terms and obtains a 1099 form to monitor the total income with the tax return. 1099 employee is an example of contractors. These employees control their work with their tools. According to Intuit Full Service Payroll, contract 1099 forms are generated.

Role of 1099 employees in Business:

The majority of small organizations hire both independent employees for a short term to complete specific projects.  Entire expenses linked with their work are analytic. One can monitor these expenses & file 1099-MISCs directly from the QuickBooks software.

What are the different steps used to set up a contractor in QuickBooks online?

The list of steps to Setup the Vendors for 1099:

  • Navigate Vendors located in the left menu bar & perform double click to open an edit window
  • Discover Edit positioned as the top of the screen & enter the Vendors tax ID number listed in Tax ID &
  • Select the box written under Track payments for 1099
  • Hit on Save button
  • Next step is performing Mapping of 1099 to Accounts:
  • Locate Vendor present in the left menu bar; discover Prepare 1099s located at the upper top of the screen. After that proceed with 1099s if you have already initiated setting
  • If you have an earlier finished setup process, the details like the organization name and their ID number is disappeared in this section.
  • Hit on Next and select the box that represents the type of compensation types
  • Select choose an account on a drop-down
  • Proceed with clicking on Next option
  • Hit on Next option
  • Now Hooray screen appears on the screen and select 1099 E-file Service to permit for a fee or you can also hit on Print & mail forms
  • Read the instructions wrote on the form & print it. Verify the form to check the alignment.
  • There are also troubleshooting tips written under the step.

What is the guidance to pay an independent contractor?

Below are the steps:

  • Navigate the Vendor menu and find out Enter Bills
  • Choose the independent contractor listed on the drop-down button located near the Vender Field
  • Fill the number of funds you want to pay the independent contractor in the box for Amount due.

List of the forms that you require to hire 1099 employees?

  • Form 1099-Misc
  • Invoices
  • Form W-9
  • A written contract

How to set up an expense Account to monitor 1099 employee’s expenses?

The need for an expense account is mandatory for the contractor’s payments. This process is especially significant for vendors to purchase products & services.

Following is the list of steps:

  • Locate the Accounting Tab and then select Chart of Accounts. Now create an account that is given below
  • Give a name as Independent Contractor Labor that is easy to identify
  • Sort out expense on the dropdown button named Account type & cost of labor on the drop-down option Detail type
  • Hit Save & close button
  • Now, whenever you enter an expense amount on an independent contractor. The next step is to link that transaction to the newly created expense amount.

How to reach us:

Hopefully, through this blog, you have learned the steps of How to Setup 1099 employees in QuickBooks online. In case, there occur any issue while implementing steps or face any other QuickBooks errors then reach QuickBooks toll-free number +1-800-816-6849. The team members are experienced to quickly tackle the core issue in less delay. Moreover, there is an online chat and email service that is available 24*7 for instant reply.

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