As a small business owner, you likely employ both contractors and employees and might be unsure whether to use payroll or 1099 to process their pay and taxes. Employers commonly face this confusion as they go to hire new employees or contractors. We will briefly cover the difference between the two types of employees. Whether you have W2 employees or 1099 contractors, AMS Payroll Software is an essential tool for employers to be timely with paychecks and keep their employee files organized.
Difference Between W2 Employees and 1099 Contractors
The IRS uses key criteria to help employers determine the difference between an employee and a contractor. In brief, an employer has control over how their employee works and withholds part of their pay for taxes. An employer has no control over how a contractor works and is only responsible for paying the agreed amount for the work the contractor does, and the contractor pays their own self-employment taxes. Employers file a W2 for their employees and form 1099 for any contractors for year-end tax reporting.
Complete Payroll or 1099 With a Payroll Software
No matter what types of employees you hire or contractors you pay, the AMS Payroll Software and W2/1099 filer can help you manage payroll and year-end tax reporting. Our modular approach allows you to build a software system to meet your needs for your business. You do not need to worry about having previous experience with payroll or 1099 forms to be able to use our easy, menu-driven format.
If you hire different types of workers, you will need to access the right forms to get them set up for paychecks and prepared for tax filing. AMS supports all of the federal payroll forms you need as well as W2 and 1099 tax forms. This means that you can create individual employee files for all the workers you employ and have the forms you need for their circumstances. You only have to enter their information once, which saves a lot of time as you gain more employees.
When it is time to complete payroll or 1099 forms, the process does not have to be stressful with the right tools. Our software helps with calculations, printing checks, and tax filing with the IRS to support every part of being an employer. As an employer, you likely have to juggle many essential operations for your business, and payroll is often a part of your responsibility. AMS products are meant to make your life easier and help cut down the amount of time you need to spend processing payroll and make sure your employees get their paychecks on time.
Try AMS Software Before Buying
We offer a free demo of our software so that you can test our services before you decide to buy. Our Sales and Information Team is available to answer questions about our products. Give them a call at (800) 536-1099 to see how AMS products can benefit your business.