1099 Employees

[indymtc]

This year, all of our employees are 1099 employees with the exception of our music/media director. That position is a w-2 position. We currently use a payroll service to deposit the appropriate payroll $$ in the appropriate accounts. In 2011, there is a possibility of all of our employees be on a 1099. If that is the case it probably doesn't make sence to spend the $$ for a payroll service. If we opt to do the payroll ourselves do I just set all of the individuals up as 1099-misc vendors in the accounts payable module and pay them that way? I assume they plus the IRS will get the appropriate forms/infomation thru the AP module reports.

[NeilZ]

This year, all of our employees are 1099 employees with the exception of our music/media director. That position is a w-2 position. We currently use a payroll service to deposit the appropriate payroll $$ in the appropriate accounts. In 2011, there is a possibility of all of our employees be on a 1099. If that is the case it probably doesn't make sence to spend the $$ for a payroll service. If we opt to do the payroll ourselves do I just set all of the individuals up as 1099-misc vendors in the accounts payable module and pay them that way? I assume they plus the IRS will get the appropriate forms/infomation thru the AP module reports.

This sounds about right, you'd print out the 1099-MISC using the Accounts Payable "Print 1099-MISC" module.

That said, you may want to look at whether or not the IRS will allow your pastor to be a '1099' contractor. In most cases, a pastor is an W-2 employee, not a contractor.

This thread may give you more info:

viewtopic.php?f=3&t=2967&p=10259

[beas]

I'll just chime in here concerning 1099 "employees" and agree with Neil.

Obviously, I don't know your situation, but I would be very careful about employees being treated as independent contractors. The IRS has several criteria for making this determination. In fact, it is often called the IRS 20 Factor Test. If you Google it, you will find many references to it. You can also go to the IRS site and find information on this.

Of course, you may have already done this and my comments are academic.