Managing 1099 tax forms can be a challenging task for small businesses. Ensuring compliance, avoiding penalties, and keeping track of payments to independent contractors requires the right software. As 2025 approaches, the market offers several excellent 1099 software solutions tailored for small businesses. This article reviews the best 1099 software options based on ease of use, features, pricing, and compliance.
Why Small Businesses Need 1099 Software
1099 tax forms are used to report payments made to independent contractors and freelancers. Unlike W-2 employees, these workers are responsible for their own taxes. For small businesses, handling 1099 forms manually can be time-consuming and prone to errors. High-quality 1099 software can:
- Automate form creation and submission
- Ensure compliance with IRS regulations
- Eliminate errors and reduce audit risks
- Store contractor data securely
With these benefits in mind, let’s explore the best 1099 software solutions available in 2025.
Top 1099 Software for Small Businesses
1. Tax1099
Best for: Automated filing and integration with accounting software
Tax1099 is a trusted solution known for its seamless automation and integration capabilities. It supports various 1099 forms, including 1099-NEC and 1099-MISC.
- Key Features:
- IRS-approved electronic filing
- Integration with QuickBooks, Xero, and Zoho
- TIN matching to verify contractor information
- Bulk filing for businesses with multiple contractors
- Pricing: Starts at $2.90 per form
Tax1099 is ideal for small businesses looking for an automated filing solution with built-in accuracy checks.
2. eFile4Biz
Best for: Ease of use and affordability
eFile4Biz is an excellent online platform that simplifies 1099 filing with an intuitive user interface. It is designed for businesses of all sizes, particularly those without extensive tax knowledge.
- Key Features:
- Cloud-based access from any device
- Print and mail services available
- Secure IRS-compliant e-filing
- Bulk import for multiple contractor filings
- Pricing: Starts at $1.49 per form
The affordability and ease of use make eFile4Biz a great choice for small businesses that want a straightforward 1099 filing solution.
3. 1099SmartFile
Best for: Businesses that need comprehensive reporting
1099SmartFile is a powerful software that allows for detailed reporting and analytics. It is perfect for businesses that need deeper insights into their contractor payment data.
- Key Features:
- Automatic error checking and IRS validation
- Supports multiple payer accounts
- Detailed financial reporting and summaries
- Option to file corrections easily
- Pricing: Custom pricing based on usage
With its emphasis on analytics, 1099SmartFile is well-suited for growing businesses that need more than just basic filing capabilities.
4. Yearli
Best for: All-in-one compliance and reporting
Yearli offers comprehensive compliance services, making it a one-stop solution for 1099 reporting and W-2 filing.
- Key Features:
- End-to-end compliance tracking
- Full-service printing and mailing
- Detailed transcript services
- IRS and state filing support
- Pricing: Starts at $4.99 per form
Yearli is best for businesses that want a complete compliance and filing package.
5. TurboTax
Best for: Existing QuickBooks users and self-employed individuals filing personal and business taxes together
While TurboTax is primarily known for individual tax returns, its higher-tier products, such as TurboTax Home & Business and TurboTax Business, provide excellent support for small business owners who need to file 1099 forms and their main tax return (e.g., Schedule C for sole proprietors, or forms for S-corps and Partnerships). Its integration with QuickBooks is a significant advantage for users already managing their books with Intuit’s accounting software.
- Key Features:
- W-2 and 1099 Creation and E-filing: The desktop versions and some online plans include a “Quick Employer Forms” feature to create and e-file W-2s and 1099s for your contractors and employees.
- QuickBooks Integration: Seamlessly import financial data from QuickBooks, a major time-saver for expense and income tracking.
- Maximum Deduction Finder: TurboTax’s interview-style interface is excellent at prompting users for all possible industry-specific deductions, maximizing self-employment tax savings.
- Guided Schedule C: Provides step-by-step guidance for completing Schedule C (Profit or Loss from Business) for sole proprietors and single-member LLCs, which is where 1099-NEC income is reported.
- Expert Assistance: Higher-tier “Live” versions offer on-demand help from a specialized tax expert or even allow an expert to do your taxes for you (Full Service).
- Pricing: Online/Desktop: Varies based on the version (Home & Business or Business) and whether you choose the online or downloadable software. Generally a higher upfront or package cost than dedicated 1099 services.
Note on 1099 Creation: While the main tax filing is covered by the product price, the creation and e-filing of the actual 1099-NEC forms for your contractors is often an additional, separate service/fee through their Quick Employer Forms.
Small business owners using TurboTax, particularly sole proprietors and S-corp/Partnership filers who use Schedule C or K-1 forms, should be aware of upcoming changes to the tax laws. This includes making the 20% Qualified Business Income (QBI) Deduction permanent and restoring 100% bonus depreciation for equipment purchases. TurboTax’s deduction features are essential for ensuring sole proprietors and S-corps maximize these new and permanent tax savings.
How to Choose the Best 1099 Software for Your Business
With so many options available, selecting the right 1099 software depends on factors such as budget, business size, and required features. Consider the following when making your choice:
- Ease of Use: Look for software with a user-friendly interface, especially if you’re unfamiliar with tax filing.
- Integration: Choose software that integrates with existing accounting systems to streamline workflow.
- Compliance Features: Ensure the platform is IRS-compliant and can file state and federal 1099s.
- Cost: Assess the pricing structure based on the number of forms you need to file.
- Support & Security: Opt for solutions that provide reliable customer support and secure data handling.
Final Thoughts
1099 reporting is an essential responsibility for small businesses that hire independent contractors. The right tax software can ensure compliance, reduce errors, and save valuable time. In 2025, solutions like Tax1099, eFile4Biz, 1099SmartFile, and Yearli provide excellent options tailored to different business needs. By carefully evaluating the features, pricing, and integration capabilities, businesses can select the best 1099 software to simplify their tax filing process.
