How to File 1099s and W2s

How to File 1099s and W2s

You already serve your customers by handling their personal tax needs. But many of your customers are probably small business owners. Strengthen sales and client relationships by also filing their business returns, including W-2 and 1099 forms.


The Filing Process 

The worker’s status and the nature of his or her relationship to the business dictate which information reporting form to send. The 1099-MISC applies to independent contractors, while the W-2 captures wages and other important information for employees.

Filing annual W-2s and 1099-MISC is a two-step process: First, the forms are distributed to the employees or independent contractors. And then the forms are submitted to the IRS or Social Security Administration (SSA).

The deadline to file is January 31. That’s the deadline to both distribute copies of the forms to recipients and file with the government agencies.

The Purpose of the W-2

Officially known as the Wage and Tax Statement, the W-2 is a requirement for all employees, regardless of the amount of time they worked for the company. A W-2 includes information about wages, tips and any other compensation for the job. Withheld taxes are also recorded on a W-2, including income tax, Social Security withholdings and Medicare contributions.

All W-2 forms need a valid Social Security number. Be aware, too, that individual states may have other requirements for reporting employee earnings that differ from the federal government.

The Purpose of the 1099-MISC

The most common 1099 form, the 1099-MISC is used to report payments of at least $600 to service providers who aren’t employees. Basically, the 1099-MISC form is to independent contractors and freelancers what the W-2 is to employees.

It covers income amounts, while also indicating the employer hasn’t deducted any federal, state or other taxes from the income. Unlike employees with W-2s, contractors get their full pay without any automatic deductions. In turn, they’re responsible for keeping track of their taxes and paying them to the government directly.

The Advantages of E-Filing

So you may be thinking, “If I have a customer needing W-2s or 1099s filed, what’s the easiest way to do it?”

The answer is electronic filing. It’s much faster and more accurate than submitting paper forms. Whether you’re filing one form or hundreds, doing it online eliminates steps, saving you time. For example, prints and mails forms to the employees and contractors and e-files the forms directly to the IRS and SSA.

Plus, there’s no need to download or install software on your computer. Everything is done in the cloud, so you don’t need to involve IT staff. When the government updates the forms, the changes are made on the website. So you can be confident you’re always using the correct version of the form.

Efile4Biz provides many additional advantages to tax preparers. For example, the site offers multiple software integrations, including QuickBooks Desktop, QuickBooks Online Plus, QuickBooks Online Accountant and Xero.

These features can also be a big help during your busiest time of year:

  • Set up multiple payers: The site allows you to file on behalf of many clients from a single account. You can also tap into volume discounts by filing for all your clients at once, as well as streamline billing by "batching" forms into a separate order for each client.
  • Access lesser-used forms: Efile4Biz has a wide variety of forms available on the site -- including numerous versions of 1098s, 1099s, W-2s and ACA forms. When you need to file one of these forms, you can use the website instead of purchasing a paper pack (containing too many forms you probably won’t use).
  • Use high-capacity filing capabilities: Have lots of forms to file? You can upload them all at once with Excel templates, or import them directly with software like QuickBooks and Xero to save even more time.
  • Say goodbye to printing and paper files: Efile4Biz safely stores the data and gives you – and your customers -- full availability to your filed forms for four years. There's never a need to save and print copies for offline storage, which can be a real time- and space-saver.
  • Make corrections online: By electronically filing the forms, you are able to edit incorrect data after you submit it.
  • Protect client data: The facility where forms are printed and mailed has achieved SOC-2 certification. This special designation is from the American Institute of CPAs. It means the facility has been carefully inspected to help ensure data security.
  • Easily file certain state returns: Efile4Biz participates in the IRS Combined Federal/State Filing Program for the 1099-MISC, 1099-DIV, 1099-INT, 1099-B and 1099-R. Plus, direct to state filings for 1099s are available for certain states.

The Key to a Successful Season

Your clients already rely on you to meet their personal tax needs. Now let them know that you can help them file their W-2s and 1099s. January is typically a busy time for small businesses. You can help by taking this time-consuming task over. If you have any questions, please contact And check out these free resources, available to you and your clients.


Want more content from Then check out our live interview with them on Wednesday the fourteenth at 11 am Pacific and 2 pm Eastern!