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5 Tips for Easing the Pain of Filing W2 and 1099 Forms this Tax Season

07th January 2010
By Karen Hall in Taxes
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Software designed for filing and printing Form W2 and Form 1099 can make the process much easier, but only when it does what you need it to for a price that is reasonable for your small business. Here are 5 tips that will help you quickly decide whether a software product you're considering is right for you.

Every year small business owner must file not only their personal and business taxes, but also report the earnings of every employee on their payroll. Gathering all that information about your employees and filling out all those Form W2's can be quite a headache, especially if you have to also file Form 1099's to report earnings paid to non-employees, like contractors and service providers.

And, unfortunately, the March 1 deadline for filing these forms means you only have two months after the end of the year to get everything filed. If yours is like many small businesses, you're also using this time to set goals for the year and plan your marketing and promotions. There's just a lot to do.

One way to make the job of filing W2's and 1099's a lot easier and faster is to use specialized software that helps you compile each employee's payroll information and automatically populate all the necessary forms. However, small business owners need to be careful to purchase the right kind of software. The software you purchase should decrease your burden, not cost you an arm and a leg or require you to spend unnecessary time learning how to use it. Let's look at a few quick tips for determining whether a particular W2 and 1099 software is right for your small business:

1. Your W2 software should be easily affordable and geared for small businesses

You're only going to use this software once a year and you don't have thousands of employees. Quality W2 & 1099 software can be acquired for as little as $39. Don't pay hundreds or even thousands of dollars for software with features small businesses don't need.

2. Your W2 software should be easy to use and not require a lot of time to learn

One downfall of many W2 and other tax-related software programs is that they are difficult to use, often designed for use by accountants. As a business owner with better things to do than spend hours learning how to use software for a once-a-year application, make sure that the software you use is intuitive, requiring very little or no learning curve.

3. Your W2 software should be capable of printing two forms per page on a laser-printed page that meets IRS and Social Security Administration requirements

The IRS and Social Security Administration now accept properly formatted laser-printed forms as an alternative to the traditional red drop-out ink forms. The right software can save your business significant money by eliminating the need for expensive red ink forms. Make sure your software has this capability and that its laser-printed forms comply with IRS and SSA requirements. Additionally, a good W2 software will print two W2's or 1099's per pageā€”one employee or contractor on the top half, and one on the bottom. This will also save you money.

4. Make sure you can try your W2 software without risk or obligation before buying it

Now matter how little you pay for your software, it's expensive if it doesn't meet your needs, is difficult to use or requires you to spend a lot of time learning it. Make sure that you can try your chosen software as long as you need to so you have the time you need to make sure it's right for you. Some companies offer limited demo version of their software or offer your money back if you decide within 30-90 days that you don't like it. But even better are companies that offer you a free download of their fully-functioning version to try before you buy.

5. Your W2 software should be updated with all current year forms required by the IRS and SSA for employee payroll reporting, including W2, W3, 1099, and 1096

This is very important. You don't want to end up with software that can only print last year's forms. That does you no good at all.

"A lot of tax-related software available for businesses have too many features and therefore cost much more than small businesses need to pay or can afford to pay," said Dr. Ge, founder of business software manufacturer "On the other hand, many inexpensive versions cut too many corners and don't do all that they claim, so you should make sure that you can try it without cost or obligation to make sure that it's right for you."

Dr. Ge says's ezW2 2009 software is one of the only inexpensively priced W2 software packages available that meets all five of the criteria listed above. The full-version software is available for free download at

Hopefully these tips will save you money and eliminate frustration for you as your business gears up to file W2's and 1099's this tax season. There's no reason this once-a-year task should have you pulling your hair out or keep you up late at night.
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