Best 1099 Software for Small Business Made Easy

Tax season can feel like a mountain of stress for small business owners—especially when you’re juggling contractors, freelancers, and multiple forms. One of the biggest headaches? Filing 1099 forms. Doing it manually isn’t just time-consuming—it can lead to costly errors, missed deadlines, and even IRS penalties. In fact, the IRS can charge up to $280 per form for incorrect or late submissions, which can quickly add up for businesses managing several vendors.

But here’s the good news: you don’t have to tackle it alone. The best 1099 software for small business makes the process faster, simpler, and far more accurate. Whether you’re in the U.S. or running a business in Canada, the UK, or Australia with U.S.-based freelancers, these tools are designed to help you stay compliant—without all the stress.

Let’s explore the best solutions out there to help you streamline your tax workflow and protect your business from costly mistakes.

Key Takeaways

• 1099 software automates the filing process, saving time and reducing errors.
• It ensures compliance with IRS regulations, preventing costly mistakes.
• Tools like Tax1099, Track1099, and Intuit QuickBooks offer unique features for small businesses.
• Automation features, such as reminders and bulk uploads, make filing easier.
• Software that integrates with accounting tools can streamline workflows.
• Consider your business size and volume when choosing the right 1099 software.
• Look for software that offers e-filing capabilities for faster processing.
• Avoid common mistakes like missing deadlines and mismatched TINs to avoid penalties.

What Is 1099 Software and Why Do Small Businesses Need It?

1099 software is a digital tool that helps small businesses prepare, file, and manage IRS 1099 forms efficiently. It automates the process, reduces human error, and ensures compliance with federal reporting rules—especially important when hiring freelancers or independent contractors.

Understanding the 1099 Form

There are two main types of 1099s used by small businesses:

• Form 1099-NEC is used to report payments made to non-employees, such as freelancers and contractors.
• Form 1099-MISC covers other payments like rent, prizes, and legal fees.

If you’ve paid $600 or more to a contractor in a tax year, you must file a 1099-NEC with the IRS and send a copy to the contractor. Missing or incorrect forms can lead to serious fines.

IRS Penalty: According to IRS.gov, penalties for incorrect or late 1099s can range from $60 to $310 per form, depending on how late the filing is.

Why Small Businesses Should Use 1099 Software

• Automation: Automates data entry, calculations, and form generation.
• E-Filing: Sends forms directly to the IRS and recipients securely.
• Accuracy: Reduces errors and ensures deadlines are met.

Real-World Example: A small freelancer marketplace in Austin, TX, reported saving over 15 hours per month using 1099 software with automation features like bulk uploads and built-in error checks.

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Key Features to Look for in 1099 Software for Small Businesses

Not all 1099 tools are created equal. The right software should be user-friendly, IRS-compliant, and designed to grow with your business. Here are the top features small business owners should look for:

Ease of Use and Setup

Choose software with:

• A clean, intuitive dashboard that walks you through the filing process step by step.
• Built-in prompts, so you don’t need a background in accounting or tax law to use it confidently.

E-Filing Capabilities

Efficient 1099 tools allow:

• Direct e-filing with the IRS, and in some cases, state agencies.
• Real-time status tracking so you know when forms are submitted, accepted, or if corrections are needed.

Compliance and Updates

Tax rules change regularly. Reliable software:

• Automatically updates according to the latest IRS regulations.
• Ensures all forms are current and formatted correctly for each filing year.

Multi-User Access & Integration

For businesses with a team:

• Look for software that integrates with tools like QuickBooks, Xero, FreshBooks, etc.
• Enables team collaboration, so accountants or business partners can access and manage filings easily.

User Feedback: According to G2 and Capterra, users prefer platforms that offer QuickBooks integration and multi-user login—citing fewer errors and better workflow control.

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Best 1099 Software for Small Business in 2025

Choosing the right 1099 software can save small business owners hours of work and help avoid costly IRS penalties. Here’s a ranked list of the top 1099 software solutions for 2025 based on features, pricing, integrations, and real-world use cases.

1. Tax1099 – Best for IRS-Approved E-Filing

Features: Tax1099 is IRS-authorized and trusted for secure e-filing. It integrates smoothly with accounting platforms like QuickBooks, Xero, Bill.com, and Zoho Books. It also supports bulk uploads and TIN matching.

Pricing: Pay-per-form; starts around $2.90/form, with discounts at volume.

Pros:

• Secure and IRS-compliant
• Supports high-volume filings
• Excel and API bulk import options

Cons:

• Slight learning curve for first-time users
• Interface feels a bit dated

Best For: Small to mid-sized businesses filing 50+ 1099s and needing a reliable system for bulk processing.

Case Study: A California-based consulting firm uses Tax1099 to file over 150 contractor forms each January, automating both form delivery and e-filing while maintaining IRS compliance.

2. Track1099 – Best for Automation and Integrations

Features: Known for its excellent automation, Track1099 offers auto-reminders, e-delivery to recipients, TIN checking, and real-time tracking. It’s completely cloud-based.

Integrates with: QuickBooks, Xero, Gusto, and other payroll/accounting tools.

Pros:

• Easy to use with modern UI
• Multi-user access and team collaboration
• E-delivery and email tracking features

Cons:

• No support for non-U.S. tax forms
• Limited reporting compared to larger platforms

Best For: Tech-savvy businesses or startups that work with independent contractors throughout the year and want a hands-off solution.

3. Intuit QuickBooks 1099 E-File Service – Best for QuickBooks Users

Features: Built into QuickBooks Online, this service offers one-click 1099 filing, with direct IRS integration and automatic contractor payment tracking.

Pros:

• Seamless if you’re already a QuickBooks user
• Minimal setup and real-time syncing

Cons:

• Only available within QuickBooks
• Limited form customization

Best For: U.S.-based businesses already using QuickBooks and managing a small number of 1099 contractors.

4. W-2 Mate – Best for Desktop-Based Filing

Features: A downloadable desktop software, W-2 Mate is ideal for those preferring offline tools. It allows you to print, mail, or e-file forms from your local machine.

Pros:

• One-time license fee (no annual subscription)
• Secure local storage
• Good for in-house record keeping

Cons:

• No cloud or remote access
• Interface is less intuitive than online tools

Best For: Traditional offices or accountants managing filings in-house and requiring offline access.

5. Yearli by Greatland – Best All-in-One Reporting Solution

Features: Yearli offers both DIY and full-service filing options. It includes postal mailing, e-delivery, and IRS/state e-filing. Known for customer support and audit protection features.

Pros:

• High support ratings
• Flexible plans (Core, Performance, Desktop)
• Ideal for businesses with complex needs

Cons:

• Slightly more expensive than competitors

Best For: Businesses seeking a turnkey solution with human support, especially during high-volume filing seasons.

Data Tip: For a detailed side-by-side comparison of pricing, integrations, support channels, and service levels, check platforms like Capterra and G2.

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How to Choose the Right 1099 Software for Your Business

Finding the right 1099 software depends on your business size, filing volume, and how much support you need. Here are key factors to consider before making a decision.

Consider Your Business Size and Volume

If you’re only filing a few 1099s each year, a basic or pay-as-you-go plan may be enough. But if you manage dozens or hundreds of contractors, look for software with bulk upload, auto-reminders, and multi-user access. Scalable tools like Tax1099 or Track1099 are ideal for growing teams.

Budget and Pricing Model

Pricing can vary some tools offer subscription plans, while others charge per form filed. Be sure to check:

• If free trials are available
• Refund policies for unused services
• Hidden fees for add-ons like TIN matching or postal delivery

This ensures you only pay for what you use.

User Experience and Support

Reliable support is critical—especially during tax season. Check whether the software offers:

• 24/7 live chat or phone support
• Email-only help options
• Help articles and guided walkthroughs

Pro Tip: Read recent user reviews on Trustpilot, G2, or Capterra from small businesses in the U.S., Canada, the UK, and Australia to gauge real-world support quality.

Common Mistakes to Avoid When Filing 1099s

Filing 1099s may seem simple, but these common mistakes can lead to IRS penalties or delayed payments to contractors.

Missing Deadlines

In the U.S., Form 1099-NEC must be filed with the IRS and delivered to contractors by January 31. Missing this date could result in penalties ranging from $60 to $310 per form, depending on how late you are.

Expert Insight: View the full IRS penalty chart here.

Mismatched TINs

Entering incorrect Taxpayer Identification Numbers (TINs) can trigger IRS B-Notices or fines. Always use a TIN Matching tool before submitting.

Resource: Use the IRS TIN Matching Program for verification.

Forgetting State-Specific Forms

Some states require separate filings. Always check local tax authority requirements before finalizing.

Not Sending Recipient Copies

It’s mandatory to send copies to contractors. Many 1099 platforms offer e-delivery with confirmation tracking to help you meet this requirement.

Final Thoughts: Making 1099 Filing Stress-Free

Filing 1099s doesn’t have to be overwhelming. With the right software, small businesses can streamline the process, reduce stress, and stay compliant with IRS regulations.

Instead of waiting for tax season crunch time, take a proactive approach:

• Evaluate your contractor management process
• Choose a platform that aligns with your workflow and budget
• Test software during off-season months to get comfortable using it

Actionable Tip: Set calendar reminders for key deadlines and create a folder for vendor W-9s to speed things up later.

Ready to simplify your tax season? Try one of the tools from our curated list today. Save hours of manual work and avoid costly mistakes—your future self will thank you.

FAQs

Who is required to file a 1099 form?

Businesses must file a 1099-NEC for any non-employee paid $600 or more during the tax year for services rendered.

What are the deadlines for filing 1099 forms?

Recipient copies of 1099-NEC forms must be provided by January 31, with paper filings due to the IRS by February 28 and electronic filings by March 31.

Can I file 1099 forms electronically?

Yes, the IRS encourages electronic filing of 1099 forms, which can be done through various IRS-approved software solutions.

What are the penalties for late or incorrect 1099 filings?

Penalties range from $60 to $310 per form, depending on the delay, with intentional disregard resulting in higher fines.

Are there state-specific 1099 filing requirements?

Yes, some states have additional 1099 filing requirements beyond federal mandates; it’s essential to check with your state’s tax agency.