Hi Bryan,
I agree with everything Douglas said. If you must use the payroll module, using the expense reimbursement to pay your contractors is the way to go. I'd set up a separate code for the contractors so that you could easily import the information into a 1099 software program.I have used the YES (Year End Solutions) software for years and it does everything I've ever wanted it to do. Newport Wave is the company that sells it.
Kind regards,
Leslie