In the course of running your business you may find it more efficient to hire a contractor to come on board and help you with some aspect of your company’s operations. Perhaps you need a logo redesign, storefront remodeling, or an individual to help you create deliverables for clients. Whatever the case, you will need to document these contracting expenses, known as 1099 non-employee compensation.
Keeping Track of Expenses
Accounting software will allow you to keep track of the items you paid for, the price paid, and other important information about this expense. It should also alert you as to whether or not you need to create a 1099-MISC, or a 1099 non-employee compensation form for the individual that performed the services. There are rules as to who must receive a 1099-MISC and who doesn’t. For instance, if you only paid $250 for a person to come in and update your company’s computers, you probably don’t need to issue a 1099 non-employee compensation filing.
If you don’t already know, the triggering threshold for a 1099-MISC form filing is $600. Still, it may still be wise to let the IRS know that this expense is legitimate, especially if you plan to deduct the expense from your company’s own business income.
Simplify Your Accounting Records
AMS software will keep track of the individuals and businesses with whom you have had dealings over the course of the year. It can also help you determine whether or not your 1099 non-employee compensation is something you need to account for. Our Common Payee File is an incredible tool for storing and tracking this data. For instance, when you pay that computer repair tech once in April and again in June, you should not have to re-enter the computer repair tech’s name and address information. It will be saved in your software. Similarly, next year when you’re preparing your filing forms, this information should pre-populate on the form along with the amount that you paid that individual during the year. The versatile data management capabilities of our software also make it easy to reclassify former contractors as new business employees.
Our Software Costs
As a matter of fact, we offer a catalog of powerful add-on modules. These software products enable you to build a custom software package and a comprehensive filing solution for your business.
- W-2/1099 Forms Filer (required platform)
- Payroll Module
- E-File Direct
- Affordable Care Act Filer
- Software-Generated Forms
- Forms Filer Plus
Deadlines for 1099 Non-Employee Compensation
AMS software will also help you keep track of when these forms should go out to the individuals who need them. For instance, W-2s should be in the mail to the employee by January 31st at the latest. Obviously it’s helpful for the employee and those contractors with whom you had business in the past year to receive those forms in a timely fashion. April 15th is the filing deadline for individual tax filing, and many people prefer to file as soon as possible to avoid penalties and fees. It is good for your business relationships to issue necessary forms as swiftly as possible.
AMS accounting and payroll software will make this possible. We’re a one-stop shop for all your business’s financial reporting needs. It will make it easy to create and populate requisite forms for both your business and those with whom you have business. AMS software is a smart choice for all your payroll and accounting needs. Sign up for a free software demo, or contact our Sales and Information team at (800) 536-1099.