1099 Payments Contractor

What you are doing so far seems close to fine. You are operating exactly as a car dealer does with their sales staff where a worker receives a "cash" advance against future earnings.  You are advancing cash to the contractors prior to receiving a final bill.  The only thing I would change is the account you are posting into and out of. Unless this is your actual petty cash account and you are distributing cold hard cash leave p.c. out of it and cut checks instead.  Better paper trail.

Create a Contractor Draw (Other Current Asset) account and post the cash or check detail to this draw asset.  Then when you settle up with check to contractor, post total billing less draw for net check.  The total billing amount will be what flows to the 1099

Thank you for that its all set up your response was helpful. One more question just to confirm I set up the contractor as vendor and selected eligible for 1099. Is this correct set up?

Thank you

Hi Mariann!

I'm happy to see that John was able to help you out. He's one of the best contributors to the QuickBooks Community.

Yes, you're right. Selecting Vendor is eligible for 1099 is our way to tell QuickBooks that vendors are independent contractors, and they should receive a 1099-MISC form at the end of the year. Speaking of which, we have in-product references about independent contractors should you need them. They can be accessed by clicking on the Help menu and choosing QuickBooks Desktop Help. Then, you can search for something like Working with 1099s.

If you have questions as you work in QuickBooks, feel free to reach back out. We'll be more than happy to assist you again.