Workers: Vendors vs Contractors

I'm not sure what you are refering to concerning the w-9 and hard copy.  I download the w-9, I hand it to the vendor and when I get it back I scan it as a pdf.

If you are trying to do it all electroncially, then you really need to also use a web based signature service like right signature or sign now.  Then at least you have some defense if you need it, as to whether or not the correct party actually signed the w-9.

That workers menu change showed up  a week or so ago in my account - I find it funny.  With all the things they could be doing to make QBO effective, with all the issues and problems it has, they spend the time on useless changes to the interface - again.

Since only QBO+ can designate a contractor as an independent contract eligable for the 1099 (not all contractors are 1099)  That change should not even be in essentails or simple start - is it?

Hi @john-pero

Thank you for submitting this feedback and sharing your thoughts. I'm one of the product managers who are currently working on this feature. Your input is very valuable and I've shared it with my team as we continue iterating.

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@nicholasmaalouf wrote:

Hey @Rustler

 

Thank you for your feedback, I will pass it on to the team. With this first release, the ability to desginate a vendor as independent contractor is now available for Simple Start and Essentials users as well. Not just QuickBooks Plus.

 

This is so QuickBooks users will not need to add the person again under the workers tab. Simply checking the 1099 box in the vendor profile will cause them to show up within the contractors section. Hope that helps calrify our intentions with the product change. 

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Are you saying that simple start and essentials can now track vendor expenses and prepare the 1099-misc?

Or is this just a label type of thing in those flavors of QBO?

@nicholasmaalouf "This is so QuickBooks users will not need to add the person again under the workers tab. Simply checking the 1099 box in the vendor profile will cause them to show up within the contractors section. Hope that helps calrify our intentions with the product change. "

Why even have a contractors tab if there is no difference between a 1099 vendor and a contractor? I just can envision people thinking they can just as easily pay their bonafide employees as illegitimate contactors. 

I am very confused.  As a new user of QB plus, we have 1099 contractors.  What is the prefered way to entered them:

Workers / Contractors

OR

Expenses / Vendor

Hi bethb,

Welcome to the Community. I'm glad to offer my assistance with entering contractors.

A recent update of QuickBooks Online included the addition of a Workers tab, encompassing Contractors which lets you avoid adding them as Vendors. Adding contractors to your account using this method extends the option for you to send an email to the contractor, inviting them to fill out tax information themselves and view their 1099 online (which frees up some time for you.) Here's an article that provides even more details on inviting a contractor: https://community.intuit.com/articles/1637708-invite-a-contractor-to-add-their-own-1099-tax-info. I recommend using Workers / Contractors, for the sake of simplicity and organization.

If you already have contractors entered as vendors, that also works. You're still given the option to "Track payments for 1099."

I hope this clears things up a bit for you. Please let me know if you have any other questions.

Yes, Simple Start and Essentials QuickBooks users can now track vendor expenses and prepare 1099-MISC. We wanted to take away the pain during 1099 tax time and allow all QuickBooks users to securely collect necessary tax information from contractors, track their payments, and prepare year end forms as smoothly as possible.

"

for the sake of simplicity and organization."

I recommend having only Vendors as the choice for contractors. In the real world there is no difference between Home Depot and the local hometown hardware store (that is a sole proprietor) Just one of them is tracked for services (screen and window repair, equipment rental)

Here's a question, can you enter Bills for Contractors? The answer better be yes, and so now what really makes them any different than a vendor?

OMG
https://community.intuit.com/articles/1637708-invite-a-contractor-to-add-their-own-1099-tax-info

I have always failed to understand why, why when intuit has a whole division of tax experts and accountants, no one talks to them before making changes.  Hel.l or at all from what I see.

The company the PAYS the contractor can be fined if that contractor is subject to back up withholding, and or does not provide a valid tax number associated with that person/business, and the paying company does not withhold and pay to the IRS 28% tax on payments made, not to mention the problems of paying someone with a false or no tax number.

The ONLY way to protect yourself is to get an actual W-9 filled out and signed.  It is signed under penaties of perjury verifying additional aspects of their right to work in this country too.

Letting the vendor fill in his information, no cerrtification signature, leaves you open with no defense at all.

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@nicholasmaalouf wrote:

Yes, Simple Start and Essentials QuickBooks users can now track vendor expenses and prepare 1099-MISC. We wanted to take away the pain during 1099 tax time and allow all QuickBooks users to securely collect necessary tax information from contractors, track their payments, and prepare year end forms as smoothly as possible.

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Why in the world does intuit make this kind of sweeping change, AT YEAR END, and not tell anyone?  Not that it matters since nothing is set up in the versions that did not have it anyway.

Has this "feature" been pushed out to all accounts yet, or is it in beta testing with only a few accounts?

ROFLMAO

I added a contractor just now to see what will happen - Does ANYone test this first? (rhetorical question the answer is obvious, no)

You can NOT save the new contractor record unless you have his tax number!!!  (manual entry for contractor info)

AND adding a contractor from the worker menu, DOES add a vendor

ROFLMAO, and from the vendor menu>edit, you CAN continue to add contact and address details - and it does not care if a tax numer is there or not, 1099 is still checked

CSL

LTHTT

My comments are pointed at the QBO process,

You have add  a contractor, but you can not save basic address data unless you have the tax ID number - so you can NOT start the process

BUT you can add a vendor as a contractor and QBO does NOT care if you ever enter a tax ID number.

When you create the contractor, that you could NOT save address data for, QBO creates the vendor which WILL allow you to save contact/address info.  SO WHY bother adding a contractor from that page?

And the contractor page does not show any transactions when you click on a contractor - all you get is contact info - what is the point?

Having the vendor create an account at intiut to log in and fill out the contractor form, is

1. a blatant attempt at garnering more customers
2. lulling the user into thinking he does not need to do anything else

I believe @bethb's question got addressed @MorganB. @bethb please let us know if you have any additional questions.

Hey @Rustler!

The core benefit in this first release is that a QuickBooks user can invite a contractor to enter their basic setup information, thus reducing the amount of data entry a QuickBooks user would need to do.

We are continuing to invest in this experience and are making enhancements based on how our customers are using it. Your feedback is very important and helps shape future iterations. I think you bring up a good point about being able to complete partial data on the card (like entering address but no tax-id). While the majority use case is either a contractor entered their own information or a QuickBooks user processing a W-9 and therefore has all the information needed to complete the card, it would be helpful to allow saving partial data. I'll add that to the list!

Thank you for your continued engagement.

@Anonymous

shouldn't you always double-check what gets input into your system?

No, I should control what get's put into MY accounting system.  Allowing an unknown entity to make entries in my records, entries that can cause me problems with the IRS, is foolish.

It is my responsibility to insure that I have documentation to protect me, showing that I complied with the legal requirements.  And keep in mind, most users are not aware of the requirement or the penalty for not insuring the tax id of a contractor is valid and/or whether the contractor is subject to tax withholding.  While the w-9 does not actually check the validty of the tax id, it does put the onus on the person signing the form, and the fact that I have that sworn statement proves my due diligence.

It would be nice if 100% of the working world had the integrity you infer, but even the white collar highly educated crowd doesn't.  Deal with tradesmen, and you will find many that are illegal, behind in taxes, behind in child support and have a judgement against them, or any number of other issues.

The world is connected, and while the US is behnd most countries in this, it is catching up.  The integration of federal and state agencies is happening.  Today it came out that if you owe the IRS more than 51K (with out a payment plan, etc in the works), the IRS will notify the state department, who will

1. refuse a passport application, or
2. refuse to renew a passport, or
3.  confiscate the passport

In TX, if you are behind in child support payments, the court notifies the DMV, and you can not renew the vehicle registration.

So, do I need to switch my vendors to contractors or can I keep everything as is?

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wrote:

So, do I need to switch my vendors to contractors or can I keep everything as is?

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Keep it as is

Is there no way to delete a Worker/Contractor? I added a contractor, regretted the decision, and now I'm stuck with this bogus record and no way to remove it.

If I go to Workers > Contractors and click on that contractor, I don't see any way to inactivate them. There is a pencil icon to edit their information, but no way to deactivate or delete that I can see.

Yes, I see you can mark both vendors and contractors as 1099 eligible, but can you

1. invite a vendor to enter their own tax info like you do for a contractor
2. is the online info approach okay with the IRS or do we still need to retain a physical W9

Thanks!