How should we handle an indepent contractor (1099 NEC) expenses and their reimbursement expenses? We need to seperate them in QB for 1099 reporting purposes.

Hi there,

When handling independent contractor for 1099 NEC expenses and reimbursements in QuickBooks Online (QBO), you need to ensure proper categorization to accurately track payments for 1099 reporting. I'm here to provide you more details about this.

First, you'll need to add the contractor as a vendor and ensure they're marked as tracked for 1099 reporting. Use separate accounts for their expenses and their reimbursement. Handling their expenses by using bill and pay bills transaction is the best way and ensure they're categorized under the appropriate account. When handling a reimbursement payment, create a Check or Expense transaction.

For more detailed information, please refer to this article: Modify your chart of accounts for your 1099-MISC and 1099-NEC filing.

Since you need to separate them for 1099 reporting, I recommend running a 1099 report filtered only to that specific contractor. Here's how:

1. On the left menu, head to Reports.
2. Search for 1099 Contractor Balance Detail.
3. Head to the Filters section.
4. Customize the Columns section if necessary.

By following these steps, you can accurately track contractor expenses and reimbursements in QBO, ensuring proper 1099 reporting and maintaining clear financial records. Always consult with a tax professional to ensure you are complying with all 1099 reporting requirements.

Additionally, we are here to provide you great assistance in setting up your contractors for their Form 1099s in QuickBooks Online. Feel free to Explore QuickBooks Payroll to ensure an efficient business between you and your contractors.

Furthermore, I've provided this article to help you with your questions with 1099 and how you can prepare for the upcoming tax season: Get your answers to your 1099 questions.

Let me know if you have additional concerns besides setting up an independent contractor for 1099s in QBO. I'm always ready to help.