1099 Contractors

HollyJoy · ‎October 29, 2024

We are adding a couple of vendors to QBO that will be contractors. Since their first payments will be in November, they will not reach the $600.00 threshold to trigger a 1099 for 2024. Is it best to just leave them as vendors for 2024 and then change to contractors for 2025 or enter them now as vendor/contractors?

As always, thanks for your answers~

Holly Fruned

ShaniamarieC

Hello there, @HollyJoy.

Let me dive into your conversation to share some insights regarding the 1099 in QuickBooks Online for a contractor not meeting the $600 threshold.

A 1099 form is generally issued when a contractor's payments reach or surpass the $600 threshold within a calendar year. If payments to a vendor set up as a contractor do not meet this threshold, there's no requirement to file a 1099, and QuickBooks Online typically will not generate a 1099 form for that contractor.

Furthermore, it's important to ensure that the contractor's information is entered correctly and that payment amounts are accurately recorded to comply with IRS regulations.

Additionally, here are some resources you can explore to gain more insights into filing a 1099 and to understand the details about the boxes on the forms:

I’ll be around the corner if you need an extra pair of hands to handle your 1099 or any QuickBooks-related matters, HollyJoy. Stay safe!

View solution in original post

Tori B

Good morning, @HollyJoy.

Thanks for taking the time to reach out to the QuickBooks Community. I hope you're having a great day so far.

Ultimately this decision would be up to you as a company. For a second opinion, I recommend consulting with your accounting professional. Your accountant can advise the best course of action based on your business needs. If you don't have an accountant, don't sweat it. You can find one here in our Resource Center.

Please remember that the program will automatically classify your contractor as a vendor if you establish a profile for them on the Contractors tab. This eliminates the need to build a new profile on the Vendors tab.

As a result, both tabs will display the profile. To ensure that all transactions are connected to the contractor's profile and are included in the 1099 preparation process, you must check the option for Track payments for 1099 if you add the contractors to the vendor's tab rather than the contractor's tab. You can reference my screenshot below.

For more information about this process, check out How to Add Independent Contractors in QuickBooks Online.

Please don't hesitate to let me know if you have any additional questions or concerns. Have a good one!

HollyJoy

Thanks Tori -

So, if we set up a vendor as a contractor and they do not meet the $600.00 threshold is 2024, is a 1099 triggered?

Holly

ShaniamarieC

Hello there, @HollyJoy.

Let me dive into your conversation to share some insights regarding the 1099 in QuickBooks Online for a contractor not meeting the $600 threshold.

A 1099 form is generally issued when a contractor's payments reach or surpass the $600 threshold within a calendar year. If payments to a vendor set up as a contractor do not meet this threshold, there's no requirement to file a 1099, and QuickBooks Online typically will not generate a 1099 form for that contractor.

Furthermore, it's important to ensure that the contractor's information is entered correctly and that payment amounts are accurately recorded to comply with IRS regulations.

Additionally, here are some resources you can explore to gain more insights into filing a 1099 and to understand the details about the boxes on the forms:

I’ll be around the corner if you need an extra pair of hands to handle your 1099 or any QuickBooks-related matters, HollyJoy. Stay safe!

Topics

Training

Community

Resources

1099 Contractors