Can You Still File Your Own Payroll Taxes If You Use Software? 

Yes, you can still file and deposit your own payroll taxes with payroll software, but only if your provider offers a basic or self-file plan. Some providers now require tax filing on every plan. Look for plans labeled “Basic,” “Self-file,” or “No tax filing,” such as Patriot Software’s Basic Payroll. 

Why some employers prefer to file their own payroll taxes

Many business owners like the convenience of handing off payroll tax calculations, filings, and deposits to their full-service payroll provider. 

But plenty of employers would rather do the tax filings and deposits themselves. Common reasons include:

• Control over cash flow: When you make tax deposits, you decide when the money leaves your bank account (but be sure to follow your IRS deposit schedule). 
• Save money: Payroll software that only calculates payroll is typically less expensive than payroll services that also deposit and file taxes. 
• Your accountant handles deposits and filings: You don’t need your payroll system to file and deposit taxes if you have an accountant who already does it.

Payroll software vs. payroll service: Which one handles tax filing?

The type of payroll product you use (DIY software or service) generally indicates whether you can file your own payroll taxes.

Payroll software calculates wages, withholding, and employer taxes; creates pay stubs; and pays employees with direct deposit or paychecks. From there, you deposit the taxes and file the forms. Payroll software without tax filing and deposits might be called “Basic,” “No tax filing,” or “Self-file.” 

Full-service payroll services do the same calculations, then deposit and file federal, state, and local payroll taxes for you. 

Here’s a quick chart showing detailed differences between DIY payroll software and full-service payroll services:

Features	Payroll Software (Self-File)	Full-Service Payroll
Calculates wages and withholding	Yes	Yes
Pay employees with direct deposit	Yes	Yes
Deposits federal, state, and local taxes	No	Yes
Files Forms 941 and 940	No	Yes
Files Forms W-2 and W-3	No	Yes

Basic payroll software that lets you file and deposit is typically best for owners who want control or who have an accountant handle filings and deposits. 

Full-service payroll software is typically best for busy owners who don’t want to handle tax filings and deposits or risk filing mistakes. 

Not all online payroll platforms offer both options. However, Patriot Software does. You can choose between Basic Payroll (you file and deposit) and Full Service Payroll (federal, state, and local taxes handled). 

I want to file myself. What are my responsibilities?

When you handle your own payroll taxes, your software gives you the numbers. It should include easy-to-generate payroll reports that show you exactly how much you paid and withheld. 

From there, you’re responsible for getting the money and forms to the right agencies on time. If you make a mistake, you’re accountable. 

Heads up: penalties for late deposits or filings can add up. The IRS charges a failure-to-deposit penalty that ranges from 2% – 15% and a failure-to-file penalty of 5% – 25%. 

Don’t want to risk it? Some payroll services provide a tax filing reliability guarantee to cover penalties and interest if if tax deposits or filings are inaccurate or late.

Here’s an overview of your responsibilities: 

Federal tax deposits

If you use a basic payroll software without tax filing, you must deposit the following:

• Federal income tax
• Social Security tax
• Medicare tax
• FUTA tax (federal unemployment tax) 

Federal forms

Unless you use full-service payroll, you are responsible for filing Forms:

Form	Use	Filing Frequency
941	To report federal income, Social Security, and Medicare taxes.	Quarterly
944	Alternative to 941 that’s only used if the IRS notifies you to file it (generally employers with $1,000 or less in annual employment tax liability).	Annually
940	To report FUTA tax.	Annually
W-2 and W-3	To report an employee’s annual wages and taxes withheld.	Annually
1099-NEC	To report a contractor’s payment of $2,000 or more during the year (beginning in 2026).	Annually

State and local taxes

Most states require you to deposit state income tax withholding and SUTA (state unemployment) tax and file state returns. There may also be state-specific taxes such as paid family and medical leave (PFML) or transit taxes. Some cities, counties, and school districts have their own payroll taxes. 

Due dates and forms vary by location. 

Questions to ask when choosing payroll software

If you have questions about tax filing and depositing, ask the following questions:

1. Is tax filing included in every plan, or is it optional?
2. Can I turn off automatic tax payments?
3. When is tax money withdrawn?
4. If I handle tax deposits and filings myself, what reports will I get to help me?
5. Can I change plans later?

You can typically find the answers to these questions on a payroll platform’s website (e.g., FAQs). Or, you can contact them directly. 

Can you still file your own payroll taxes? The bottom line

You can still file and deposit your own payroll taxes if you use software, but it depends on what software provider you use.

Before signing up, check whether tax filing is optional and whether you can turn off automatic payments. 

With Patriot Software, the choice is yours

At Patriot Software, you can sign up for Basic Payroll or Full Service Payroll. You choose the plan that best suits your preferences. 

• Basic Payroll: Run payroll and handle payroll taxes yourself. Our software calculates wages and taxes, and you can use payroll reports to easily see what you owe. Free direct deposit, Auto Payroll, free employee portal, health benefit integration, and other must-have features are included. 
• Full Service Payroll: Everything in Basic Payroll, plus we deposit federal, state, and local payroll taxes and file required forms for you.

Frequently asked questions

This is not intended as legal advice; for more information, please click here.