In QuickBooks Online, contractors are automatically organized as vendors, and that's completely normal! Since contractors are independent businesses or individuals you pay for services, QuickBooks keeps them under vendors to track expenses. The Contractors section simply links their profiles to the 1099 filing system when tax time rolls around.
There are two ways to add a contractor, and both work for 1099 tracking:
Option 1: Through the Contractors section (the simplest path for 1099 tracking)
1. Go to All apps, then select Expenses & Bills, then select Contractors.
2. Select Add a contractor.
3. Enter the contractor's name and email address. Check the Email this contractor box if you'd like them to fill in their own tax information, or leave it unchecked to enter it yourself.
4. Select Add contractor.
Any contractor added this way is automatically eligible for 1099s. QuickBooks tracks their payments in the background, so when tax time comes, the information is already there.
Option 2: Through Expenses & Vendors
If a contractor is already set up as a vendor, or if you added them through the banking transaction screen — you can still track them for 1099 purposes. Open their vendor profile and check the Track payments for 1099 box. This connects their payments to the 1099 filing module.
Either way, contractors will appear in your vendor list. That's expected and it doesn't mean anything is wrong.
If you have more questions about setting up your contractors or preparing 1099s, just reply below and we'll help you get there!
Helpful Source:
Enter your E-mail address. We'll send you an e-mail with instructions to reset your password.