Set the Tax Tracking type to None so that the amounts don't report on tax forms.Enter a new item name and select expense account.Select the Addition item type and click Next.Pick the Custom Setup button, then hit Next.Go to the Lists menu and choose Payroll Item List.To start, let's create a payroll item first. If you're currently using our Payroll Service, we've different ways to record non-taxable reimbursement. This way, you can record your contractor's non-taxable reimbursement in QuickBooks. This way, you'll be guided accordingly in handling the 1099 contractor expense reimbursements.īut if you have the same question and scenario with the customer's Darshane, I'd recommend doing the ShiellaGraceA steps above. This way, your 1099 form will be accurate at all times.ĭo you have the same issue with the client's info513? If so, I'd suggest following the explanation with Rustler. I want to address your contractor issue, help you manage your contractor's non-taxable reimbursement in QuickBooks Desktop. ![]() Meaning the invoice was originally under an account for office supplies and I changed it to the EE Non-Taxable one that I made.ĪNYONE who knows what they are doing regarding this please correct me if I've done anything incorrectly. I also want to note that the transactions re-itemized using the EE Non-Taxable Reimbursement were easily located in the Chart of Accounts, so if I screwed it all up at least it will be easy to locate to correct.Īlso as a note - you will need to go back through every single invoice/bill made to the contractor in question and re-assign the account it was under for ones you don't want recorded as taxable income. I re-ran their expected 1099 report for this year and the expected total was correct. Regardless - this worked and removed the non-taxable expenses I had paid to the contractor. I used UNASSIGNED - if you know the correct one PLEASE for the love of Pete let me know. I could not find ANYTHING after over an hour of research regarding what the tax line mapping items mean or how they reflect on a W-2 or 1099. I need the items to either not show up on a 1099 as taxable income or be put in Box 12: Code L (Non-Taxable Reimbursements for EE Business Expense) so it won't affect my contractors. Tax-Line Mapping - now here was the tricky part that I may have gotten wrong. I also add a description so future-me would know what to use it for. Go to Lists > Chart of Accounts > Account (icon at bottom) > NewĮnter Account Name - I named mine EE Non-Taxable Reimbursement and entered mine into the sub-account of Independent Contractors, but keep in mind it might not be the same for you depending on how you're charting your contractors. Please keep in mind I am not an accountant but this removed the non-taxable expenses from my contractor's 1099 report. ![]() We're always here to help you every step of the way. Feel welcome to come by anytime if you have other questions or concerns. Classify Workers Correctly: Independent Contractors vs.These resources will guide you on providing services to your contractor. I've also added these links below that I'm sure you'll find helpful. You can learn about the different pay methods for contractors at this link: Pay Methods For Employees Or Contractors. With these steps, you'll be about to record the reimbursement without including it on the 1099 mapping. Look for the account you've just created under Category column, enter other information on the field.Then, choose "Expenses" or "Other expense" as Account Type and enter the Account details.Īfter that, record the reimbursement using that account. Go to Accounting, then Chart of Accounts. ![]() Thanks for dropping by the Community, can create a new expense account for your non-taxable reimbursement.
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