Managing payroll for vendors, independent contractors, and freelancers is a different ball game as compared to doing it for regular, full-time employees.
Whether you outsource a portion of your company’s work to freelancers or are solely about managing independent contractors, you will definitely benefit from having a structured payroll management system in place.
To make payroll management easy for you, you can use intuitive accounting software such as QuickBooks.
If you have been managing independent contractors or outsourcing work to freelancers for quite some time, you might as well know that 1099 filing in QuickBooks is a crucial step you can’t skip when it comes to setting up QuickBooks payroll and managing it.
Why do you Need to Setup 1099 Employees in QuickBooks?
If you pay $600 or more to freelancers and/or independent contractors in one year, it’s a must to follow the Internal Revenue Service law and file the 1099 processes.
This will help you as well as your independent contractors and/or freelancers to streamline tax returns.
Managing payroll for independent contractors and/or freelancers doesn’t necessarily have to be challenging as QuickBooks makes it easy for you.
By storing all the important information about your independent contractors and/or freelancers, QuickBooks helps you complete their 1099 filing processes the hassle-free way.
Steps to Set up 1099 Employees in QuickBooks
Steps to add contractors/freelancers:
Step 1 – The first step is to log in to your QuickBooks account and view the dashboard.
Step 2 – On the left console, hover your mouse on the Workers section and choose contractors.
Step 3 – Choose the ‘Add a Contractor’ option to add contractors/freelancers.
Step 4 – Once you have added all the contractors/freelancers, send an invitation to them for filling out the W-9 form.
Step 5 – After your contractors fill in their tax information in the W-9 form, you’ll be notified in your QuickBooks inbox.
Step 6 – After having all the information readily available, you will be able to file their 1099 electronically.
Steps to Change Contractors into Employees in QuickBooks
Step 1 – The first step is to make sure that you create a detailed backup of the original information and layouts of the vendor payroll set up.
Step 2 – If you have paid cheques to your vendors/contractors in QuickBooks, make sure to print them all.
Step 3 – The next step is to create an employee record for every vendor/contractor you want to change into an employee for payroll.
Step 4 – When following step number 3, make sure to alter the vendors’ names in the Vendor records or simply delete the checks to avoid duplication
Step 5 – When creating new employee records, enter payments that you have previously made as paychecks.