The short answer is, yes; you can switch 1099 e-file providers mid-year. You are not inherently obligated to stay locked into your current e-file provider simply because you are issuing them payments. If your e-file solution is no longer working for you, it is important to look for a better one that aligns with your needs or requirements.
Whether a small business has five or 50 employees, investing in Advanced Micro Solutions’ 1099-etc E-File software is an affordable and flexible option.
As a small business, we know the most comprehensive software cannot always fit in a small business’s budget. Our E-File solution is part of a larger program that is the most affordable solution on the market. Small business users can choose from two distinct e-filing methods:
- E-File Direct (add-on module)
- E-File Services (via third-party vendor)
Why Do Small Businesses Switch 1099 E-File Providers Mid-Year?
Switching your e-file program when it does not work for you or no longer meets your needs is an important step for a business. The success of your business, and its overall compliance, usually relies to some degree on how you file tax documents.
A small business might switch e-file providers mid-year if:
It becomes too expensive. Some programs charge users a fee-per-form rate that adds up if a company is growing. You might find it more affordable to switch to a flat rate e-file service if you see expansion in your future. Certain software might also include extra charges when you:
- Submit 1099/W-2 corrections
- Re-file specific forms
- File state forms to agencies
The overall user experience declines. Getting software that is confusing or has too steep of a learning curve can be a waste of a business’s time or resources better spent in other areas. Talk to an e-file provider to see how automated the system is or if you will need to fulfill many manual steps for simple filings.
They need more support than a current program. Long wait times during the height of tax filing season is an unnecessary inconvenience for e-filers. Utilizing software that comes from providers who understand small business needs will provide a shorthand that users may not receive from other providers.
Compliance becomes trickier for them. It is not unusual to hire more independent contractors than you anticipated. You might also have people working from new states, which requires your small business to meet additional filing requirements. Accuracy is essential and only possible if you select the appropriate software.
There is a less than 1% error rate for e-filed tax returns versus 21% for paper returns.
Simplicity, affordability, and compatibility with other programs are typically the core reasons why small businesses switch 1099 e-file providers mid-year. It is better to head into an upcoming tax season feeling confident than uncertain or overwhelmed.
What You Need Before Switching E-File Providers
There is certain information that you need to gather if you handle the tax filing in-house rather than outsourcing your support to an accountant. Make sure that you get up-to-date contractor details, such as:
- Legal name
- Address
- Taxpayer Identification Number (TIN)
Obtaining your year-to-date payment totals is also essential. You should have access to how much your business has paid so far in a calendar year and the figures isolated to each of the individual contractors.
If you already filed forms, collect copies or confirmations of previously submitted 1099 forms. Staying aware of which states require separate filings or registrations also makes a transition easier for e-file software users.
Why Small Businesses E-File with AMS Software
Filing with our 1099-etc E-File software might feel less glamorous than cloud-based solutions, but our software mixes comprehensive features with affordable pricing and total transparency. Whether you have recently had a bad tax filing season, or you want to switch systems before your number of contractors increases, we are eager to offer two distinct solutions for you.
E-File Direct
- Flat fee
- Unlimited number of form filings
- Users can verify, view, and print files
E-File Services
- Volume pricing (fee per form)
- Forms are e-filed through a third-party vendor
- Different service levels available
If your 1099 seasons feel unnecessarily overwhelming, it might be time to find a better system to streamline your tasks. Switching at any point in the year is possible, but you might find that switching from June to August is the easiest period. Switching then will give you plenty of time to review your business’s totals.
Still have questions or are interested in seeing our system work with your data? Download our free 1099-etc Demo software. The demo will give you greater insight into our base W-2/1099 Forms Filer program and how the E-Filer and other add-on modules work alongside it.