Whether you’re building a home or work as a freelancer, the 1099 is an important form to know. Put simply, this form is used to report non-employee income. Most view it as a contractor’s version of a W-2 form. There seem to be dozens of iterations of the 1099, fulfilling every income-generating niche out there.
1099s are ubiquitous in modern American life, and if you’re responsible for generating the forms, you’ll need a software tool to help. Directions for certain 1099 iterations can change every year, so it’s important to get an updated, adaptable software tool. Below, you’ll find a few essential aspects of 1099 form filing software to guide you on your search for the perfect solution.
What Matters in a 1099 Form Filing Software Platform
In any given year, millions of Americans will complete and submit 1099 forms. In fact, the number of 1099s filed with the IRS is climbing steadily with the proliferation of the gig economy. As a result, there are a lot of 1099 software options available. But what will work best for you and your business? Here are a few important factors to seek out in a 1099 form filing software platform.
- Printing. The 1099 must be completed by the employer and distributed to all necessary contractors. This distribution most often happens with printed versions of the completed form. It’s important to find a software that can print 1099s because it provides an important convenience to the preparer.
- Semi-automated calculations. People responsible for preparing 1099 forms dread the occasional miscalculation, which can occasionally result in a fine. Finding a software that automatically calculates important figures will mitigate this excess stress.
- Payer and payee information. Part of the beauty of investing in a 1099 form filing software platform is that it decreases the time necessary to complete all relevant forms. This is done, in part, by saving relevant information within the system. In a good 1099 software, you should only need to input contractor and personal information once, then have the necessary form fields auto-populate.
- Flexibility. If you’re responsible for filling out and distributing 1099 forms, you’re probably also responsible for W-2 forms. You should find a software that covers both income-based forms. Additionally, it will help if your software works in conjunction with other tasks, whether within the platform or with add-on platforms from the same company. If you’re investing in a tax and wage software, you might as well cover all your bases.
If you’re in the market for a 1099 form filing software platform, there are plenty of options. To figure out what works best for you, spend some time sorting through your priorities. This will make the decision easier and provide you with a better-fitting product.
Is There a 1099 for Real Estate?
1099 forms are designed to track and report financial transactions that occur during a calendar year. In most cases, whether you’re a developer or an individual selling a home, a real estate transaction will yield proceeds. You’ll need to report this as income, but a regular 1099 won’t do the trick.
Form 1099-S is specifically designed for sales or exchanges of certain real estate. The person responsible for closing the transaction must report the proceeds to the IRS and provide the 1099s to those involved. The form is short, comprising only 6 sections, but it is an essential piece of paperwork in an already complicated process. If you’re planning to fulfill any real estate transactions, this is a good form to bookmark.