Setting up 1099 contractors
It’s important to set up 1099 contractors correctly in QuickBooks to ensure payments are tracked for 1099 reporting purposes. Within the last year, there have been significant improvements made in QBO to streamline the process of setting up and tracking payments to 1099 contractors. In previous years, you would have to set up a contractor in the Vendor Center and flag the vendor as a 1099 contractor. In the most recent version of QBO, there is now a Contractors Center that allows you to collect the information normally provided on a W-9 form electronically. A W-9 form is similar to a W-4 form for an employee. It includes the vendor’s name, mailing address, business entity type (sole proprietor, partnership, S-Corp, or C-Corp), tax ID number, and signature.
To set up a new contractor, you simply send an invitation to them, which requires them to create a user ID and password. Once they do so, they can complete the W-9 form online. Once...
