During tax season, employers need to complete tax forms both for their W-2 employee wages and any 1099 non-employee compensation from the year. The IRS has revised the filing process for non-employees in recent years, so some employers look for guidance in filing the right tax forms. Filing for 1099 non-employees requires a separate tax form from other forms of miscellaneous compensation. This post covers the difference in filing for 1099 workers.
While the process differs for W-2 and 1099 forms filing, employers can rely on Advanced Micro Solutions tax software to accurately file for all workers. AMS software supports the appropriate tax forms you need for each tax season and makes filing easy with a menu-drive format. Employers can utilize our accounting and payroll software to navigate the filing process and complete their tax filing on time and with accuracy.
Reporting Requirements for 1099 Non-Employee Compensation
Non-employee compensation includes any payments an employer makes to an independent contractor, freelancer, or other person who is not an employee of the business. For these types of wages, employers use a 1099-NEC for reporting. Previously, employers could report non-employee compensation along with other miscellaneous income on the 1099-MISC. However, the IRS reintroduced the 1099-NEC in 2020, which employers now use to distinguish non-employee compensation from other miscellaneous income. Employers should also note the difference between filing for their employee versus their non-employees. Employers file a W-2 for employees on their payroll from whom they withhold payroll taxes.
To correctly file 1099 non-employee compensation, employers need to submit the 1099-NEC form to the IRS and generate copies for the employee and for the business’ files. The form requires the payer’s tax identification information and the amount of non-employee compensation for that payee. You can view directions from the IRS for more detailed instructions. No matter what wage reporting forms you need to use for tax season, a quality tax software can help you generate, complete, and file the forms more efficiently.
Use AMS Tax Filing Software for 1099 Non-Employee Compensation Reporting
The AMS 1099/W-2 forms filer software package helps employers process all the wage reporting forms they need during tax season. The versatile and easy-to-use software enables employers to navigate the tax filing process and remain organized. Employers can use the menu-drive format for easy data input and intuitive form completion. AMS tax software supports all the W-2 and 1099 tax forms you will use for tax season.
With AMS forms filer software, you only need to enter payer and payee information once, and the software will save the information for the next time you need. Additionally, you can import information from multiple sources with an easy transfer. If you opt to add on more software modules to the base package, you can electronically file applicable tax forms. You can try a free demo of AMS software to try the platform for yourself before buying a package. Call our Sales and Information Team at (800) 536-1099 with any questions on how AMS software can help you manage the tax filing process for any type of worker.