Employees and payroll

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!