It’s time to stop burning the company’s midnight oil to meet 1099 tax filing deadlines each year. Your business is spending too much time and money on 1099 preparation if your AP team is:
- Chasing down W-9 or W-8 forms from suppliers
- Using Excel spreadsheets
- Manually tracking payments to these suppliers and independent contractors
- Filing and distributing paper 1099 returns
Simplify and speed up the process of filing 1099 IRS information returns for taxes. With automation software solutions, your business can automatically start collecting W-9 and W-8 forms, tracking payments, and receiving 1099 tax reports for filing 1099s or optionally eFiling 1099s.
Follow our quick guide to learn how your business can automate to achieve online 1099 filing securely and accurately, using best practices in accounts payable tax compliance.
Table of Contents
What is a 1099?
A 1099 form is an IRS information return prepared by the payer or third-party payment network to report certain types of compensation paid to suppliers, independent contractor non-employees, or investors that have submitted W-9 or W-8 forms. The 1099 form type varies by purpose and includes different forms like 1099-MISC, 1099-NEC, 1099-K, 1099-DIV, and 1099-OID.
How Do You File a 1099 with the IRS?
File 1099s electronically if required to eFile because your business is submitting at least 10 form 1099s (changing from a 250 form threshold) for 1099 filings beginning January 1, 2024.
Your business can opt to file the red Copy A of the official IRS paper 1099 forms with the IRS by sending an IRS transmittal Form 1096 with a set of all 1099 forms for each payee for whom an IRS Form 1099 is required to be prepared if it qualifies for paper filing..
For paper 1099 filing, you can order paper forms (including 1099s and 1096) from the IRS website at least 15 days before needed or sooner for the following tax year. If your business files 1099s electronically, don’t use a transmittal Form 1096.
Besides filing copy A of Form 1099 with the IRS by the due date, you need to distribute the other copies of Form 1099 to the recipient who gets a 1099 and any applicable state. If the state has income taxes, then send Copy 1 of Form 1099 to its State Tax Department and send Copy 2 of Form 1099 to the recipient to file their state tax return. Keep Copy C of Form 1099 for your business records.
Your business is required to send Copy B of the 1099 form to the recipient by a different deadline (per 1099-MISC instructions on the irs.gov website) for their review and use in preparing a tax return. The recipient may inform your business if any corrections are required. If so, reissue a corrected form to the recipient and file corrected copies with the IRS and any applicable state.
Can You File a 1099 Electronically?
Yes, you can file Form 1099 electronically. Filing 1099 forms electronically (eFile) is a more efficient method for your business and the IRS than using paper IRS 1099 forms. According to 1099 rules and filing requirements, the deadline for a particular year for filing 1099s electronically may be different than the deadline for filing 1099s on official IRS paper forms.
Beginning with January 2024 form 1099 filings, your business is required to eFile 1099s if submitting at least the 10-form threshold for 1099 information returns.
Ready to improve your company’s online 1099 tax filings?
Download our “Executive Summary: KPMG on AP Tax Compliance” to learn how your business can achieve 1099 tax compliance for global supplier payments. And look for the latest “Best Practices in Accounts Payable Tax Compliance with KPMG” free live webinar on CPAacademy.org (sponsored by Tipalti) for one hour of continuing professional education.
Use Tipalti AP automation software integration with self-service supplier onboarding for collecting electronic W-9 and W-8 forms before paying, automating supplier verification, and tracking payments. Choose the Tipalti-Tax1099 software integration option or Tipalti eFiling service to automatically eFile 1099s using your electronic Tipalti 1099 tax compliance data.
Understanding 1099 Automation
To understand 1099 automation, you need to know how to get automated 1099 tax compliance reporting with AP automation and global mass payments software and how to file 1099 electronically as an option.
Our focus of understanding 1099 automation is on how to file 1099-MISC electronically and how to file 1099-NEC electronically.
Tipalti shines for producing 1099 tax compliance reports your company can use to prepare its online 1099 filings. Tipalti provides an even greater productivity boost when Tipalti is optionally integrated with Zenwork 1099 Tax software for automated eFiling of these 1099 forms with the IRS and applicable income-tax states and Recipient copy distribution.
Tipalti Zenwork 1099 Tax Filing Integration
See the YouTube video, “Tipalti Zenwork 1099 Tax Filing Integration,” to learn more about how it works.
Tipalti also offers an optional 1099 eFiling service for its automation software customers.
Benefits of Filing 1099s Online
Benefits of filing 1099s online are:
- Time and cost savings compared to paper 1099 documents preparation and filing by mail
- Avoiding IRS penalties from late-filing delays and TIN (taxpayer identification number) errors
- Quick confirmation of the 1099s eFile receipt at the IRS
- Easier and faster IRS processing of 1099s, without lost or misplaced submissions
More benefits can be achieved when your company uses AP automation and global payments software besides the added efficiency, stronger financial controls, and cost-cutting advantages of AP automation and automated global payments.
For global tax compliance for payments and 1099 filing needs, your business will get:
- Global supplier verification
- Automated supplier TIN matching verification
- More accurate data to generate automatic tax compliance reports
- An audit trail for internal use and for your CPAs
- Optional add-on for automated 1099 eFiling
With standard 1099 tax compliance reports, your company can use the filing information to prepare its 1099 electronic filings. And your business can take an optional step to enable 1099 automation for eFiling Form 1099-MISC and Form 1099-NEC with add-on Tipalti-Tax1099 software integration.
Simplify Contractor & Supplier Taxes with Tipalti’s 1099 Automation
Tipalti is well known for its best-in-class, end-to-end AP automation, and mass payments software that combines with your ERP system or accounting software to save your business time and money.
Tipalti software offers optional integration with Zenwork Tax1099 software to completely and simply automate your 1099-MISC (Miscellaneous Information) and 1099-NEC (Nonemployee Compensation) eFile with the IRS and applicable state filing, and distribute copies to payee recipients. The integrated Tax1099 software easily captures your Tipalti 1099 data for optional 1099 tax forms eFiling.
Tipalti also offers an optional 1099 eFiling service for Federal and State filers.
Pricing of Optional Tipalti-Tax1099 integration for eFiling 1099s
Tax1099 offers different levels of software accounts, including Essential, eFile Plus, and Enterprise. Per-1099 pricing for the ZenWork Tax1099 integrated with Tipalti option uses a low-cost, tiered-volume model for small businesses with different volume thresholds or quoted at a high-volume rate for larger companies with over 500 1099 forms to be eFiled.
How Tipalti-Tax1099 Integration for 1099 Automation Works
Tipalti-Tax 1099 integration for eFiling 1099s works immediately when you have at least 12 calendar months of payment history in Tipalti. But if you don’t already have 12 months of payment data in Tipalti, you can use a flat-file upload from Tipalti that’s merged using a Tipalti Excel/CSV template into Tax1099. Ask Tipalti for more details.
Steps to achieve optional Tipalti-Tax1099 integration for eFiling 1099s are:
- Begin the setup process for Tipalti integration, even with a free Tax1099 account.
- Purchase a Tax1099 eFile Plus or Enterprise account.
- Create a Payer record in Tax 1099 software.
- Authenticate a connection between Tax1099 and Tipalti with your Tipalti credentials.
- Choose to either pull Tipalti data directly from Tipalti into Tax1099 or upload the Tipalti 1099 tax report into Tax1099.
- On the left Tax1099 menu, use the dropdown Import menu to choose Tipalti
- To eFile 1099 reports, select the Payer (if you have more than one), Tax Year, and Form Name, which is the 1099 report type of either 1099-NEC or 1099-MISC forms.
The following screenshot image shows how to use Tax1099 with Tipalti integration to automatically eFile 1099 forms with the IRS and applicable State, using Tipalti 1099 payment data. You’ll also get automatic Recipient copy distribution through Tax1099.
Besides the Tipalti 1099-MISC and 1099-NEC forms for eFile through Tax1099, Tax1099 also offers 1099-K forms and 40 forms for IRS and State eFiling.
Tax1099 lets you distribute each Recipient 1099 copy in multiple ways:
- Email from Tax1099 with delivery-read receipts
- Tax1099 portal, considered by IRS as digital delivery
- USPS, with Tax1099 printing and mailing the 1099s to recipients
Tax1099 also lets you distribute IRS B-Notices saved on Tax1099 via email to recipients.
Conclusion
Your staff can put in long hours or the business can spend money to increase headcount when manually preparing and filing paper 1099 forms with the IRS.
To avoid that, use Tipalti AP automation and global payments software. Then choose and simply implement the optional Tipalti-Tax1099 software integration or Tipalti 1099 eFiling service to automatically eFile your 1099-MISC and 1099-NEC forms and distribute copies to recipients using your Tipalti 1099 data. 1099 automation is a shortcut that easily produces faster and more accurate results. Request a demo to learn how to increase reporting productivity when filing form 1099s online.
