Software That Will Complete and File 1099-MISC Forms for You
If you're a business owner, you're required to file 1099-MISC forms with the IRS to report any payments you made to vendors for goods or to contractors for services. The form also reports prize money paid out and just about any other compensation made to anyone who is not your employee. You're required to do this because these individuals (or companies) must pay taxes on this income, and since they aren't your employees, you haven't withheld any taxes from the payments. You should provide the vendor or contractor with a copy of the form as well.
You must file a 1099-MISC form whenever you pay any non-employee $600 or more during the calendar year, although there are some exceptions to this rule. This means $600 in total for the year, not per individual payment. If you make three payments of $200 each, you would have to report all three payments on Form 1099-MISC.
Most accounting software programs can help you prepare 1099s. These are five of the most helpful.
Real Business Solutions: W2 Mate
Real Business Solutions develops accounting and tax software for small business owners, including 1099 preparation software. The 1099 software is bundled into W2 Mate, which also processes W2 forms for employees. This software is compatible with a number of different programs including QuickBooks.
You can create, file, and print 1099-MISC forms using this software. First-time users can also download a free trial before spending $39 for the full product.
Zoho Books is a cloud-based accounting software program for small businesses. The software allows users to create multiple reports and forms including invoicing, banking, inventory, expenses, bills, and taxes.
Pricing is separated into three tiers: Basic at $9 per month, Standard (the most popular) at $19 a month, and the Professional package for $29 per month. The benefits to higher-tier plans include room for more contacts, authorized users, and automated workflows.
Zoho Books offers detailed tutorials on how to prepare and file 1099s using its software. This tutorial comes with screenshots so the user can easily reference what they're doing with the instructions. Zoho Books is also compatible with other filing software, and it offers tutorials for how to file with those alternatives, as well.
Greatland's Yearli software lets you enter your 1099-MISC information online, after which you can file the forms electronically with the IRS and transmit them to your vendors and contractors. You also can import the 1099 data from other accounting software (including Zoho Books).
There are three separate subscriptions, each with different price points and features. The Core package is free and allows the user to fill out 1099-MISC forms. The Performance package costs $99 each year and gives the user additional forms to file. The Premier package costs users $699 each year with the most features. None of the packages include filing fees, which range from under $10 (core) to more than $700 (premier). If none of the packages fit your needs, you can customize a package.
Efile1099NOW is an IRS-approved e-filer, so you can use this program to e-file your 1099 forms without the help of third-party software integration. All data can be entered manually online, or it can be imported from Microsoft Excel or QuickBooks. In addition to e-filing, this software can send copies of forms directly to vendors or contractors.
Users must create a free account in order to use the service. The actual cost you will pay for the service depends on how many forms you file and how they are distributed (e-file, print, and/or mail). The more forms you file, the less you'll pay per form—ranging from $4.50 (for e-filing, printing, and mailing) to $1.25. Just e-filing reduces those per-form prices to $1.50 and $1.
Advanced Micro Solutions
Advanced Micro Solutions is a complete payroll processing provider, but it also can be used for individual tasks such as filing 1099s. The software for filing 1099s is its base product and necessary for using any of its other services.
If filing 1099s is all you want to do, that's the only software you'll need to purchase. You can order the 1099 software for $79. The service will file all forms directly with the IRS and SSA electronically. The forms can also be printed out or exported.
Be Sure to File Your 1099-MISC Forms
Don't wait until the last minute to ensure you understand the filing requirements for 1099-MISC forms. It's critical that you file your forms with the IRS on time and provide them to contractors and vendors before the yearly deadline. The penalties for noncompliance, especially failing to file or filing late, can be substantial. It's much easier (and cheaper) to avoid penalties and prepare the information on time.
The information contained in this article is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current tax or legal advice, please consult with an accountant or an attorney.