How To Set Up A Contractor In QuickBooks

Want to set up a contractor in QuickBooks? If yes, then it is definitely a good decision to track the 1099s form or file a contractor in advance. This will help you to track all the payment-related files of a contractor. In this article, we will know how to set up a contractor in QuickBooks, and the way to track their payments.

To Set Up a Contractor in QuickBooks Online:

There are 2 steps available to complete the procedure, and they are:-

1. Add a contractor as a vendor in QuickBooks
2. Track 1009 payments from contractors.

Step 1: Add a Contractor As a Vendor

Follow the procedure to add contractor as a vendor:

• Select ‘Contractors’ in the “Payroll’ menu.
• Choose “Add a Contractor”.
• Then input your Contractor information, or else Choose the Email the Contractor Checkbox, in that you can fill it out.
• After completing all the process, Choose “Add Contractor”. 

Step 2: Track Contractor Payments For 1099s

Follow the procedure to track the contractor payments for 1099s:

• Select Supplier from the Expenses menu.
• Choose the vendor you need to track and then open their profile.
• Select ”Edit”
• Select  and Check the subsequent payments of indicator 1099.

It will start tracking your payments in case you are ready to file your 1099s, then it is easy for you to add the tracked payments to the form.

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To Create & Set Up a Contractor in QuickBooks Desktop For Windows:

Follow the three given steps to set up a contractor in QuickBooks Desktop;

1. Turn on the 1099-MISC features.
2. Add a Contractor as a Vendor.
3. Track Contractor for 1099.

Step 1: Turn On The 1099-MISC Features:

Follow the procedure to turn on the 1099-misc features;

• Choose the “Edit” menu and Select” Preferences”.
• Choose the tax:1099 menu.
• Select the Company Setting tab.
• Choose “Yes”, Under the section “Do your file 1099-MISC forms?”.
• Finally Choose ”Ok”, to save your setting after completion of the process.

Step 2: Add a Contractor as a Vendor:

Now follow the procedure to add a contractor as a vendor:

• Select the Supplier menu and Select the Supplier Center.
• Choose the New Vendor and Select “New Vendor”.
• For each tab fill out the field, and by W-9 you will get the information from.
• It is possible to edit or change your information if you need to.
• Choose Ok, after you complete your process.

Step 3: Track Contractor Payments For 1099:

Follow the procedure to track contractor payments for 1099 in QuickBooks Desktop

• Choose the Vendor menu and Select Vendor Center.
• Now, select the Vendor’s name and Choose “Edit”.
• Choose the Address information tab and then review the information.
• It should have Correct two-letter state abbreviations and ZIP code.
• Vendors legal name should be the First and Last Name field in case the Vendor is a person.
• Leave the Company Name field blank incase if you do not have the Company Name. This will avoid showing repeated terms while you prepare your 1099-MISCS.
• Select the tax setting tab.
• Choose and Check the Vendors eligible for 1099.
• Under the Vendor Tax ID field, input the Vendors tax ID number.
• Choose “Ok”.
• It will start tracking your payments.

To Set Up a Contractor In QuickBooks Desktop For Mac

If you are a user of QuickBooks Desktop for Mac then this is the procedure for you to set contractor;

1. Turn on the 1099-MISC Feature.
2. Track 1099 Payments for Contractors.

Step 1: Turn On The 1099-MISC Feature:

First of all, you have to turn on the 1099 misc feature to set up the contractor by following the below procedure;

• Choose “Preferences”, Under the QuickBooks menu.
• Choose the 1099 section.
• Select  and Check whether the 1099-MISC form is a field.
• Choose the accounts for each 1099 category that suits your business for reporting and taxations purposes.
• Under Account Column, then from the drop down list Choose “account”.
• Select “Selected Accounts” and Click the accounts that you need in the Select Accountant Windows.
• Once all your Accounts have been Selected, Choose Ok.
• Generally business report amounts only for Box7 for the compensation, it will not be reported on all 1099 categories.
• In case you need more information regarding seeking advice from an accounting expert or IRS.
• Input new amount in the Threshold column in case if you want to change a threshold amount.(If you need you do this step).

Step 2: To Track Contractor Payments For 1099:

• Select Vendor under the List menu.
• Choose the Vendor and Choose Edit Vendor under the Vendor List Window.
• Choose the Address Information tab.
• The Vendor Legal Name should appear in first and Last Name fields. In case a Vendor is a person.
• Leave the Company Name field blank to avoid double names on the 1099-MISC form in case you do not know the person name but you know the Company name.
• Select the Additional Info tab.
• Input the Vendors tax ID number under the tax ID field then Choose the Vendor eligible for 1099 Checkbox.
• Choose Ok.

To Set Up a Contractor in Intuit Full Service Payroll: 

You need to complete the below steps to set up a contractor in Intuit Full Service Payroll.

1. Add a Contractor as a Vendor.
2. Create Contractors direct deposit and input Prior Payments.

Step 1: Add A Contractor As A Vendor:

• Choose the Employees tab.
• Select Add new Contractor.
• Choose Contractor type.
• To  Create Contractor for Individual or Business Contractors. For that case Select the type of information QuickBooks collects.
• Finally fill out the Contractor Information.

Step 2: Create Contractors Direct Deposit And Input Prior Payments:

• Under the Pay method field Choose Edit.
• And select the “Direct Deposit” option from the ‘Pay Method’ field.
• Click ‘Ok’.
• Choose the Check box and enter appropriate information in case you have paid to contract outside the service this calendar year.
• Make sure the  form 1099-MISC sends to the Contractor at year end you have the correct dollar amount while adding the lump sum total in case you have already paid the Contractor.
• Generally business report amounts only for Box 7 for the compensation, it will not be reported on all 1099 categories. In case you need more information regarding seeking advice from the accounting expert. Input business oriented expenses which have been paid advanced by the Contractor that you need to pay back them.
• Choose Save.

Steps To Set Up A Contractor In Intuit Online Payroll:

For Intuit Online Payroll, follow the given steps to set up contractor, and to track 1099s form;

1. Add a Contractor as a Vendor.
2. Create your Contractor direct deposit and input prior payments.
3. Create a Contractor with Workspace.

Step 1: Add a Contractor as a Vendor

• Choose “Employees tab”.
• And click on the “Add a Contractor” under the Contractors.
• Choose Contractor type.
• Creating a Contractor as an individual or a business Contractor will decide the type of information QuickBooks collects.
• Then fill the Contractor information.

Step 2: Create Your Contractors Direct Deposit & Input Prior Payments:

• Select Direct Deposit present next to Payment Method.
• Choose the Checkbox and enter the information in case you paid the Contractor outside the service the calendar year already.
• Generally business report amounts only for Box7 for the compensation, it will not be reported on all 1099 categories. In case you need more information regarding seeking advice from the accounting expert. Input business oriented expenses which are paid advanced by the Contractor that you need to pay back to them.
• Click ‘Ok’.
• Choose Ok after entering the Contractors bank account information.
• To verify the bank info, Choose “Agree”.

Step 3: Steps To Create a Contractor with Workforce:

• Select to view their Payments Online.
• Choose to send Email.

We hope the article will guide you to set up a contractor in QuickBooks. We have tried to provide different types of procedures for different QuickBooks products. You just need to choose the right one. Still, if you have any confusion regarding this article then you can contact our certified QuickBooks experts for an instant solution.