Boost Productivity with Cutting-Edge 1099 Software Options

Looking to make tax season easy peasy and never drown in paperwork again?

Let’s face it – keeping up with 1099s manually is no walk in the park. There are so many payments to track, deadlines to meet and IRS regulations to comply with that errors are easy to make and costly to correct.

Fortunately…

1099 software has never been more advanced or easy to use. Good software can take care of the hassle for you while freeing up valuable time and preventing costly mistakes.

In this guide, we’ll cover:

• why 1099 software is more important than ever
• features you should know
• how it can help improve productivity
• how to pick the best solution for your business

Let’s jump in!

Why Is 1099 Software Important Than Ever?

The gig economy is booming. In fact, ADP research reported that employees that received a 1099 represented 27 percent of overall employment in 2024.

That’s BILLIONS of dollars worth of gigs being completed each year.

Plus, according to the IRS…

The e-file threshold was dropped from 250+ forms to just 10. This effectively means ALL businesses MUST file their returns electronically. Paper filings are no longer accepted for the majority of businesses.

Not having access to the best 1099 software can make tax season extremely difficult. The right platform makes it easy to generate 1099 forms and file them electronically for you.

You could continue to handle them manually and run the risk of:

• missing deadlines which leads to IRS penalties
• data entry errors which could lead to an audit
• spending hours entering/rekeying data
• falling out of compliance when regulations change

For example. Did you know that every hour spent entering data manually is an hour you aren’t generating more revenue for your business? Or that a missed IRS deadline costs your business $205?

Yeah. Not handling your 1099s correctly can come at a high price.

Best Features to Know

1099 solutions aren’t all created equal.

Some programs exist only to create your forms. Others provide robust compliance solutions that make data import, generation and e-filing simple.

The best features to look for include:

E-filing Support

The IRS has made it clear that electronic filing is the way of the future. Now more than ever, 1099 software MUST provide direct e-file through their FIRE or IRIS systems.

Say goodbye to printing, stuffing envelopes and making trips to the post office.

Bulk Imports and Processing

Did you know that keying in contractor data is one of the biggest causes for data entry errors? Don’t spend your time entering information that should be automatically imported.

Look for software that can pull contractor data from spreadsheets, accounting software or even payroll systems.

Advanced platforms run a validation check while importing to ensure your data is accurate.

Automatic Calculations

Computing all your totals used to be a nightmare. What if you calculated the wrong amount and got hit with a penalty from the IRS?

Automatic calculations not only save you hours of work but can prevent costly mistakes. Software automatically calculates your totals and verifies TINs along with flagging any inconsistencies prior to filing.

Recipient Copy Delivery

One more thing. Good 1099 software will handle your IRS filing as well as provide the recipient copy of the form to contractors.

Keep contractors happy by offering electronic delivery. Many software programs will email your contractors their 1099 directly.

Multiple State Filings

Want another headache? Not filing your 1099s correctly for your state.

While the IRS does have a Combined Federal/State Filing informational program for several states, others require you to file separately.

Don’t worry. Software allows you to easily keep track of each state’s individual filing requirements. Best of all, it files for you.

How Can Software Improve Productivity?

Now that you know what to look for let’s discuss how 1099 software can help improve productivity.

The World Economic Forum states that the gig economy workforce grew to a market size of $556.7 billion in 2024.

With a growing gig economy come a ton of contractors. Odds are, if you aren’t managing 1099s already, you will be in the near future.

Here’s the thing with manual processing. It doesn’t scale well.

Let’s use a hypothetical example

1099 process without software:

1. Obtain W-9 from contractor.
2. Track payments made to contractor (all year).
3. For each contractor, calculate total amounts.
4. Manually enter data into IRS form.
5. Print form and mail to contractor.
6. File with IRS before deadline.
7. Send any corrections or amendments.

Pretty taxing (no pun intended) if you have to do this for each contractor. Now multiply that by however many contractors you have. Ugh.

1099 process with software:

1. Import contractor data.
2. Automatically generate all forms.
3. E-file directly with IRS.
4. Distribute recipient copies electronically.
5. Profit!

Not only does software save you valuable TIME it also reduces the chance for error.

Productivity and businesses go hand in hand

Businesses who implement a reliable 1099 software experience many benefits. Let’s take a look at some of the top benefits below.

**Time savings. ** Quite possibly the biggest benefit. What used to take you days only takes an hour or two. Allow employees to work on higher value tasks versus spending their day data entry.

**Reduce Errors. ** Speaking of data entry, manual entry leads to errors. Software automates validation checks to ensure data is correct before hitting send to the IRS. No more errors = less corrections/amendments = less chance of penalties.

**Stay Compliant. ** Another nice benefit of using software is they update the product when IRS guidelines change. They automatically track deadlines so you never miss another one.

Pick the Right Solution

Alright, now it’s time to find the perfect 1099 solution for YOU.

Keep in mind there are tons of software options out there. Some will integrate with existing accounting/payroll software while others act as standalone programs.

When picking the right software, take into account:

• The size of your business and volume of 1099s
• If you need the software to integrate with other systems
• Support and software updates
• Security

Conclusion

There you have it. Managing 1099s has never been easier.

With advancements in software and the increase of contractors thanks to the gig economy, businesses NEED to implement a 1099 software into their processes. Whether you’re a contractor yourself or a business owner, spend some time now evaluating software so you aren’t frantically searching for the best option when tax season hits.

Here’s a quick recap:

• All businesses are REQUIRED to e-file their 1099 information returns
• Doing things manually is a time sucker and only leads to errors
• Not all software is created equal
• By investing in the right software, your business can save countless hours throughout tax season.