1099 Contractor paid on behalf of company

Hi there, Skycart.

Welcome back to QuickBooks Community. I appreciate you for providing detailed information about your concern. I'll share steps to ensure that payment shows up on the 1099 and track your payments out of your account.

You're on the right track with recording the transactions or applying the JE to the bill. To show the payment on the 1099 and track payments out of your account you'll have to open the Bill you created. This way, you're able to review the expense account associated with the entry and make sure that the bill is connected to the right expense accounts in the 1099 wizard.

To start with, I suggest going to the Expenses tab and locate the Bill created and open it. 

Here's how:

1. Click the Expenses tab at the left menu and choose the Expenses section.
2. Locate the bill created and double click it to expand the page.
3. Go to the Category details section. 
4. Double-check the expense account assigned to the entry and make any changes if necessary.
5. Hit Save and close.

For additional information on how you can add contractors to track payment you make to them, you can open this article: How to set up contractors and track them for 1099s in QuickBooks.

Please refer to this article to see different troubleshooting steps to fix various 1099 issues in QuickBooks Online: Troubleshoot common 1099 issues.

As always, feel free to visit our QuickBooks Community help website if you need tips and related articles in the future.

Please touch base with me here for all of your QuickBooks needs, I'm always happy to help. Have a good one.

Thanks for your reply Christie.  There is only one expense account associated with the contractor and has been accounted for in the Wizard.  The same expense account was used with the Bill.  What I noticed was that the JE entry zeroes out the amount paid.  Also I read a post here saying that for AP, AR, etc. that are associated with NAMES, JEs shouldn't be used.  Can you provide another suggestion on how to get the payment to show on the 1099?

Hello again, @Skycart. Thanks for getting back to us. 

When creating the Journal entry, the account should allocate to Accounts Payable (A/P) under the contractor's name. So this can be applied to the Bill as a Bill payment. 

However, if the Journal entry post to an expense account, this will result in zeroing out or doubling the expense. 

To know more about preparing 1099, see the below articles for your guide:

• Create a 1099 report for vendors and vendor payments
• Fix 1099s that don't show the right amount
• Fix missing contractors or wrong amounts on 1099s

Don't hesitate to leave a comment below if there's anything else you need, and I'm glad to help you out. Have a great day.

OK I figured it out.  My QBO entry and my example above is correct.  The payment was made out of my personal account on behalf of the company so that the contractor can get paid before Christmas.  However, the JE was recorded after December therefore it did not show up in the 1099 for the 2020 tax year.  Just changing the recording date of the JE solved the problem.

Thanks all for you input.