How To Register A Bound Check Qb Online

February 18, 2022

Hiring An Independent Contractor? How QuickBooks Online Can Assist

The COVID-19 pandemic created millions of self-employed individuals and small businesses. Whether they chose to, or circumstances forced them to, these new entrepreneurs had to learn new means to get paid and to prepare their income taxes.

If yous're thinking about taking on a contract worker, you, too, will accept to educate yourself on the paperwork and processes required to comply with the IRS' rules for his or her bounty. Information technology's much easier than hiring a full-time employee, but information technology all the same takes some cognition of how QuickBooks Online handles these individuals.

Y'all'll as well need to make certain that the person y'all're hiring is indeed an contained contractor and not an employee. The IRS takes this distinction very seriously. If you're at all unsure of your new rent's employment status, we can help you sort it out.

Creating Records for Contractors

In one case new contractors have accustomed your offer, you'll demand to have and then fill up out an IRS Class Westward-ix. You tin can download a copy hither. Employees complete the more detailed Form Due west-4 so that the employer can withhold income taxes correctly, but you won't have to withhold taxes for your contract workers. They will exist responsible for computing and paying quarterly estimated taxes and filing an IRS Form 1040 every year.

You, though, will exist responsible for sending them an IRS Course 1099-NEC (Non-Employee Compensation) every January if you paid them more than $600 during the previous year. You do non need to transport a 1099-NEC to a corporation or to an LLC that is treated as a C Corp or an S Corp.

You can complete the Vendor Information window for each independent contractor, checking the box in front of Track payments for 1099.

Using the information the contractors provide, you tin create records for them in QuickBooks Online. If you lot don't have a QuickBooks Payroll subscription, yous tin set them up as 1099 vendors. Click the Expenses tab in the toolbar and so on the Vendors tab. Click New vendor in the upper right to open up the Vendor Data window. Complete the fields for the worker and be sure to check the box in front of Track payments for 1099, as shown in the partial prototype above.

The vendor records you create volition appear in QuickBooks Online's Vendors list (once again, Expenses | Vendors). Click on 1 to open it. You can toggle between ii tabs hither. The start, Transaction Listing, will eventually display all your financial dealings with that contractor. Vendor Details opens the tape you just created, which you can edit from this screen.

Paying Contractors

When contained contractors send you invoices, you'll render to this aforementioned screen. There are three ways you can pay them. Click the down arrow next to New Transaction in the upper correct corner to come across your options (or expect down at the end of the row while you're in list view). You tin can record the debt as a Bill if yous want to pay it afterwards (or if that's the way you lot structure your recordkeeping). If you're paying information technology right abroad, yous can create an Expenseastward or write a Bank check.

You can cull an option from this vendor action carte to pay your independent contractors.

When you lot click one of these, QuickBooks Online opens a form with many of the contractors' details already filled in. You lot'll demand to complete any boosted fields at the superlative of the screen, and then either tape the payment or debt under Category details or Item details, depending on how yous do your bookkeeping. Either fashion, you'll be able to enter the quantity and charge per unit and/or amount and mark it billable (with a markup percentage, if you lot'd like) to a client or projection.

You're probably going to want our help hither, since there'due south more than i way to pay independent contractors. If you subscribe to QuickBooks Payroll, you lot can apply the service'due south contractor features, which include the ability to invite your contractors to fill up out their own records in QuickBooks Online. Yous may also want to add an business relationship to your Chart of Accounts, and we'd want to offer guidance there. And you need to ensure that yous're classifying payments correctly, so they'll appear in 1099 reports and 1099s themselves.

Creating records for independent contractors and paying these individuals seem like they should be simple operations. Just anytime you're dealing with payroll bug, y'all're dealing with peoples' livelihoods – and the IRS. Nosotros strongly encourage you lot to permit u.s.a. assistance you get this right. Contact u.s., and we'll brand certain you're handling your worker payments with absolute accuracy.

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Source: https://www.meeposcpa.com/blog/hiring-an-independent-contractor-how-quickbooks-online-can-help/45517

Posted by: steelefeep1985.blogspot.com

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