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Add contractors or vendors when preparing 1099s

If you pay outside consultants or contractors above a certain amount—a threshold of $600—you're required to file 1099s for them with the IRS. QuickBooks Online can help you track payments to these vendors, and help you do the proper tax filings. If you don't track these types of payments throughout the year, you'll have a lot of editing and data entry to do in January to meet tax deadlines.

What is a 1099?

If you use unincorporated vendors, such as outside consultants or subcontractors, you need to send a 1099-MISC form to those who are paid more than a specific amount per year.

The form is called 1099 Miscellaneous Income because your vendor will need to claim these payments as income.

You must mail or email these forms to your vendors by January 31 for payments you made in the previous tax year. You must also mail these forms to the IRS by February 28 along with a Form 1096. If you choose to e-file instead, you also have until April 2nd to submit the 1099 to the IRS. No Form 1096 is required when you e-file.

Note: It's always a good idea to consult your accountant to see whether certain vendors qualify for a 1099. You can also visit the IRS website and find info and instructions for Form 1099-MISC.

If a 1099 vendor is missing from the list, you can make them eligible for a 1099:

  1. From the left menu, select Expenses, then Vendors.
  2. Select the vendor you want to convert.
  3. At the upper right, select Edit.
  4. Mark the Track payments for 1099 checkbox at the lower right. You can also mark a group of vendors for tracking at once from the Prepare 1099s page.Note: Selecting the box doesn't necessarily mean that QuickBooks Online will prepare 1099-MISC forms for the vendor. QuickBooks only tracks payments you make in case they are reportable on a 1099-MISC.

See also

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