If you`re running a small business and have hired an independent contractor to help out, one of the first things you`ll need to do is add them to your QuickBooks account. This will allow you to accurately track their hours and payments, as well as generate important tax forms at the end of the year. Here`s how to add an independent contractor to QuickBooks:
Step 1: Get the Contractor`s Information
The first step is to gather all the necessary information from your independent contractor. This includes their name, address, phone number, email address, and tax identification number (either their Social Security Number or an Employer Identification Number). Make sure you have all of this information before proceeding.
Step 2: Set Up a New Vendor Profile
Next, navigate to the “Vendors” tab in QuickBooks and select “New Vendor.” Enter the contractor`s name in the appropriate field and fill out any additional information you have.
Step 3: Set Payment Terms
The next step is to set payment terms for your contractor. Under the “Payment Settings” section, you can choose how you`ll pay the contractor (e.g., by check or through direct deposit) and how often they`ll be paid. This is also where you can set up any discounts or credits you want to give the contractor.
Step 4: Add Tax Information
Finally, you`ll need to add your contractor`s tax information. Under the “Tax Settings” section, select the contractor`s tax ID type (either Social Security Number or Employer Identification Number) and enter the appropriate number. You`ll also need to enter the contractor`s tax classification – either “Individual/Sole Proprietor” or “Corporation” – and their tax filing status (e.g., “Single” or “Married”).
Step 5: Save and Review
Once you`ve filled out all the appropriate information, make sure to save the vendor profile and review it for accuracy. You can always go back and make changes later if needed.
Adding an independent contractor to QuickBooks is an important step in managing your small business. By accurately tracking their hours and payments, you`ll have the information you need to generate tax forms and keep your financial records up-to-date. Follow the steps above to add your contractor to QuickBooks and get started!