Hello there, @khite, 

I'll share some insights about the differences between an employee and a vendor. 

An employee is someone you pay with paychecks, withhold taxes, and give a W-2 form at the end of the year. He/she completes each of the following forms: 

• I-9
• W-4
• State W-4 (if applicable)

For more information, please read through this article: Employees Overview. You can also check out the IRS guidelines about an employee category. 

On the other hand, a vendor is someone that you pay money to, such as utility, landlord or subcontractor, who does work for you. Please see this article for more details: Vendors Overview. 

Before setting up a 1099 vendor in the program, please visit the IRS guidelines to see if your vendor falls under the Independent Contractor category. 

This will get the information you need for today, @khite. 

If I can be of further assistance, please let me know. I'll gladly help. Cheers!