Tax software should support a range of tax forms. Your company might need a 1099 form for an independent contractor, W2 form for an employee, or even payroll maintenance. The key to choosing the best software often comes from a deeper understanding of the tax forms you, as an employer, must provide to workers.
The 1099 form is almost like an independent contractor W-2. Employers provide the 1099-MISC form to contracted workers, and the workers themselves pay their own taxes. The same employer might also have employees that work on a part-time or full-time basis. These workers need W-2 tax forms, and the company reports the workers’ incomes and withholds payroll taxes for the workers.
Think of W-2 forms as a holistic financial report of an employee’s year with the company. A 1099 form provides independent contractors the opportunity to create their own financial report, which might include a mosaic of information from different companies.
It is important to use tax software that reflects your company’s workforce. Whereas W2 employees might have dominated the workforce at one time, that designation is no longer the only employment standard. There has been an increase in 1099 workers in the past few years. This increase of 1099 workers might be explained by economic uncertainty and the need for multiple income sources, the wealth of opportunities that come from technological innovation, or a lack of employed work that could provide an independent contractor W-2 employee status.
Regardless of the cause, we are living in a “1099 economy,” in which gig workers, independent contractors, and freelancers have become a driving commercial force. 1099 employment can offer flexibility to employers and workers alike, as work and payment are often determined on a contractual basis. An influx of short-term, project-based work, with reflective payment models, means employers need tax software that is responsive to both W-2 and 1099 workers.
The nature of work is changing, faster than we can truly measure or predict. The 1099 and W-2 forms themselves can help you categorize workers. The right tax software can help you organize the tax information provided by those forms. Do not waste precious company time with manual tax filing, or a tax software that does not support your company’s workers. Tax software can eliminate human error, resulting in a more satisfying tax experience for you and your workers.
As the end of January approaches, so do deadlines for employers to provide the necessary forms: 1099 for an independent contractor; W-2 for an employee. Advanced Micro Solutions W-2 and 1099 filer is the solution to your company’s tax season stress. This software helps your company reduce error and stay compliant with tax processing procedures. It will automatically file W-2 and 1099 forms to the IRS and SSA. The W-2/1099 Forms Filer allows you to plan for your company’s future with the capacity to support up to 99,999 workers per payer. Choose a tax software that supports your company’s workers, one that is rich with a combination of 1099 independent contractor/W-2 employee tax needs.