1099 Software FAQs

February 21, 2019

How do I use Patriot’s 1099 Software to pay contractors?

You can easily pay contractors and other vendors. Simply add the contractor information, enter the payment, verify the amount, and print or handwrite a check. Our 1099 Software will track how much you pay contractors throughout the year.

What is the difference between Patriot’s 1099 Software and Accounting Software?

With the 1099 Software, you can pay your vendors and issue Form 1099s. The Accounting Software has all of those capabilities, plus additional features such as account deposit/withdrawal tracking and customer billing.

Why do I need to keep track of contractor payments?

The Internal Revenue Service requires that businesses keep track of how much they pay contractors annually and requires the issuance of 1099 and 1096 forms.

What is a 1099-MISC form?

The 1099-MISC form is required by the Internal Revenue Service for reporting annual payments to an independent contractor (non-employee), consultants, investors, etc.

What is a 1096 form?

Form 1096 is the Annual Summary and Transmittal of U.S. Information Returns. On this form, you will transmit the vendor 1099 forms to the IRS.

Do you handle other types of 1099s besides 1099-MISC?

No. Our 1099 Software is made specifically as a way to pay contractors and report payments made to independent contractors, consultants, investors, etc.

How do I know if a person is a contractor or an employee?

The IRS provides common law rules in determining whether a person is an employee or contractor. Please visit the IRS website.

Can I use direct deposit for contractor payments?

At this time, Patriot Software does not offer direct deposit for the payment of 1099 contractors.

What is an independent contractor?

An independent contractor is a self-employed individual who performs services for various companies and/or people. An independent contractor provides their own equipment and supplies and performs services on their own schedule. For more information on defining an independent contractor, visit the Internal Revenue Service website.

What should I do with the 1099 and 1096 forms after they are generated?

Distribute any 1099 forms directly to the contractors or other vendors. Send the 1096 form along with Copy A of all 1099s to the Internal Revenue Service.

What will a contractor do with the 1099 form that I give them?

The contractor will include the 1099 with their annual tax returns.

When do I have to give a contractor a 1099?

Please visit the IRS website for details on filing requirements.

What paperwork do I need to give to a contractor before they can get paid?

Before the contractor begins work, you should provide the contractor with an IRS W-9 form to complete and return to you. This form requests the contractor’s Social Security or federal employer identification number, address, and tax classification. For a copy of the form, visit the IRS website.