The 1099 Federal form is used to report the income earned by individuals who do not fall under the ‘Employee’ category for a business. To put it in simpler words, employers file this form with the IRS reporting the money they paid to an individual who is not their employee for certain services rendered by them, and they are usually referred to as contractors. This form must be filed when the amount paid to the individual is more than $600 in a particular year.
The process of How To Set Up a 1099 Contractor involves 2 steps. They are adding your contractor as a vendor in your books and activating the feature to track payments made to them. Once you activate it, the application will record all the transactions that you may need to file with Form 1099. Ask your contractors to fill out W-2 forms as the required information for Form 1099 can be found on it.
Want the procedure for setting up a 1099 contractor in QuickBooks? Go through this blog for detailed steps or talk to an expert for guidance. Just call at +1(855)-856-0053.
How to set up a 1099 contractor?
The answer for how to set up a 1099 contractor depends on the version and device of Quickbooks you are using. The steps for doing so are different for QBO, QBD and Intuit Full Service Payroll. Let’s look at them in detail:-
How To Set Up a 1099 Contractor for QuickBooks Online?
There are two steps involved in setting up a 1099 contractor in QuickBooks Online. Adding your contractor as a vendor and then turning on the feature for tracking payments:-
Step 1- Adding Contractors as Vendors
- Go to the Contractors tab.
- Click on Add a Contractor.
- Now fille in the required details and tick mark Email this contractor box. (Contractors can fill out the information themselves if you mail them this form)
- Click on Add contractor after you are done.
Step 2- Track the payments you made to Contractors for 1099s
- Go back to the Vendors menu.
- Select the contractor you just saved as a Vendor for whom you wish to track payments for 1099.
- Click on the Edit button.
- Now tickmark Track Payments for 1099 checkbox.
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How To Set Up a 1099 Contractor for Intuit Full Service Payroll?
The process of setting up 1099 Contractor for Intuit Full Service Payroll is different. It does not track the payments you made. You will have to first set up your contractor as a vendor and then make it ready for direct deposits. You will have to note down all the payments made at the end of the year and then fill the form manually.
So now we know how to set up a 1099 contractor in QuickBooks. The QuickBooks Online, QB for Windows and QB For Mac offer an option to track payments throughout the year. Intuit Ful Service Payroll and Intuit Online Payroll require you to manually calculate the money you paid and then file it with the form. If you still have some doubts, reach out to an expert at +1(855)-856-0053 and they will provide you with the required guidance.