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UcanorWecan
January 16, 2024
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Brokerage setting up real estate agents that are 1099. Contractors, vendors or customers?

  • January 16, 2024
  • 1 reply
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Hi,

Setting up a brand new brokerage office.  The Real Estate agents will be 1099 and not Employees.  We will receive the full commission checks and deposit them.  Then issue agents commission checks minus any transaction related fees.  We will also be billing agents monthly for associated monthly charges such as office space rental.  

 

Should the agents be both Vendors and Customers to accomplish this?  When would they be setup as a Contractor.  A little confused on how to differentiate of when to use each type for this scenario. (Customer vs Vendor vs Contractor)

Thanks in advance for the advice.

Best answer by Bryan_M

Hi there, @UcanorWecan.

 

Let me add the info I shared above about real estate agents in 1099.

 

There's no reason for a real estate agent to become a customer. To track and pay their 1099, they should be set up as contractors or vendors.

 

For future reference, if you want to learn how to correct 1099 forms after you filed them, read this article: Correct or change 1099s in QuickBooks.

 

Let me know if you have additional questions about managing your 1099s, you can post it here in Community. I'm always here to answer those questions for you. Have a good one.

1 reply

Bryan_M
Bryan_M
January 16, 2024

Thanks for raising your concern here, @UcanorWecan.

 

Let me help you set up your real estate agent's 1099 and direct you to best help with the difference between customers, vendors, and contractors in 1099.

 

We can set up the real estate agents as contractors. QuickBooks tracks all their related payments, so when you need to file their 1099s, you already have all their info.  Moreover, know that any non-employee for whom you might pay $600 or more in a given year, needs a 1099.

 

Before you start, we recommend having your real estate agents fill out a W-9. This gets the info you need to make the setup quicker. You can download W-9 forms directly from the IRS.

 

Here's how to set it up:

 

  1. Go to Payroll, then select Contractors.
  2. Select Add a contractor.
  3. Enter your contractor’s info, or select the Email this contractor checkbox so they can fill it out.
  4. When you're done, select Add contractor.

 

For more info, you can read this article: Set up contractors and track them for 1099s.

 

Concerning the differences between customers, vendors, and contractors in 1099s, I recommend reaching out to an accountant for better views and understanding.

 

Additionally, you can read this article to learn how to prepare and file your 1099 in QuickBooks Online: Create and file 1099s with QuickBooks Online.

 

Feel free to come back here if you have more questions about setting up your agent's 1099s. I'll be willing to help. Keep safe and have a good one.

U
UcanorWecanAuthor
January 16, 2024

Thank you for your response.  I understood how to setup Vendors and Contractors not an issue.   Is there any reason for a real estate agent to be a customer is my question?  With the scenario I provided?  I don't think so, just want to confirm I'm not missing something.   

 

So with just a vendor or a contractor account, I could , invoice, or pay the agent and track their 1099 correct?

 

Thanks again!

Bryan_M
Bryan_MAnswer
January 16, 2024

Hi there, @UcanorWecan.

 

Let me add the info I shared above about real estate agents in 1099.

 

There's no reason for a real estate agent to become a customer. To track and pay their 1099, they should be set up as contractors or vendors.

 

For future reference, if you want to learn how to correct 1099 forms after you filed them, read this article: Correct or change 1099s in QuickBooks.

 

Let me know if you have additional questions about managing your 1099s, you can post it here in Community. I'm always here to answer those questions for you. Have a good one.

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