Independent Contractor File
Independent contractors paid $600 or more during the year should receive 1099s at the end of the year. See IRS Publication 1779 in the documents folder that resides in the Payroll installation folder. You can get there by minimizing or closing the Payroll program, right-clicking on the Payroll icon used to open the program, and click "Properties" at the bottom. In this screen you will see a button near the bottom labeled "Open File Location". Click that button and it will open the payroll directory where you will see the Documents folder. This contains Publication 1779 as well as other pertinent IRS documents. You can also talk to your tax advisor about classification of individuals as independent contractors if you have qualification questions. Be sure to use caution when determining the status of someone being an employee vs. an independent contractor since incorrect classifications could result in penalties from the IRS.
To add a new independent contractor:
- Click on the Add button on the Independent Contractor File screen.
- Enter the name, the dba (doing business as) if applicable, contact information, and Tax ID number (either a Social Security Number or federal tax number).
- Pay Labels tab - enter a description in the pay label field(s) and the corresponding rate.
- Withholding tab - if the W-9 provided to you by the contractor is filed as subject to backup federal withholding, click on the backup withholding box. The percentage set by statutory federal rates will be withheld. You can also specify a dollar amount to be withheld for state withholding.
- Click on OK.
You may edit independent contractor information for future payments at any point. Just click on the fields to be changed and enter the new information.
The right side of the independent Contractor File screen has 4 tabs. The first tab shows the Pay Labels, which may be edited. The second tab shows the Withholding information for each payment. The Totals tab shows the total payments processed for the year and withholdings, if applicable. The fourth tab - Dates Paid - lists the date and net pay for each payment. The Totals and Dates Paid areas may not be edited.
Moving Through Employee/Independent Contractor Records
Use the First, Previous, Next, and Last buttons to move through employee records.
To go directly to a specific record, click on the down arrow that appears at the right of the name field at the top of the screen. A drop-down list will appear that lists all employee records in alphabetical order. Select the employee whose record you would like to view by clicking on the name.
The Employee File defaults to including all employees. You can limit the list to only active or terminated employees, if you have both types of records.
