Managing 1099 contractors in QuickBooks Online
If you hire an individual to perform services for your business and they are not an employee, they are considered an independent contractor, also known as a 1099 contractor. Payments to 1099 contractors must be tracked so that you can report this information to the IRS at the end of the year.
To ensure payments are tracked properly, you will need to set up contractors in QuickBooks, add an account to post all payments to, pay contractors with a paper check (or an electronic fund transfer (EFT), or debit/credit card), and provide a 1099 form to all the contractors who meet the threshold at the end of the year. If the total payments to a contractor equal $600 or more, you must issue a 1099 form and report this information to the IRS. Failure to track and report payments to 1099 contractors could lead to penalties and fines.
Pro Tip: To determine what constitutes a 1099 vendor vs an employee, be sure to visit http://irs.gov...
