Payroll for 1099 Contractors

Spend less time stressing over paperwork. Roll pays your 1099 contractors and files your taxes for you so you can keep your eyes on the prize. 🏆 You’re welcome.

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What you get with Roll

You’re passionate about your business — that’s why you started it! But you may be a little less passionate about the ins and outs of filing your taxes, or how to run payroll, or what a 1099 contractor is (and isn't).

Well, we’ve got you covered — not only with basic information around these topics that you’ll need to move forward, but with an easy app that takes care of most of the nitty gritty stuff — so you can get back to being an entrepreneur.

Topics covered:

1099 contractors

You may be your business’s only full-time employee, or you may not have enough work to justify hiring a full-time employee, which means you’ll likely want to use a 1099 contractor — sometimes called a 1099 employee.

These are independent contractors who you would still need to pay via your payroll, but may have specific arrangements when it comes to hourly rates, length of their contract, or other variables. Remote workers, interstate commuters, digital nomads — Roll can handle all the details of paying workers across the country. It is ultimately up to the 1099 contractor to pay their own income taxes on both the federal and state level, as well as many other taxes associated with their job.

The Roll app makes adding 1099 contractors (or full-time employees, for that matter) easy. Just chat “hire employee” and Roll will guide you through each step. No training or tutorials needed. You’ll indicate whether the worker is an employee (W-2) or an independent contractor (1099) and answer a few simple questions. To get started, you’ll need your Employer Identification Number (EIN), business banking account and routing number, and employee names and emails.

Paying 1099 contractors in Roll

Just chat “hire employee” and Roll will guide you through each step. No training or tutorials needed.

Various 1099 forms

The term 1099 contractor comes from the IRS form used to account for the payments and expenses associated with the contractors. There are actually a couple dozen different types of 1099 forms, most for quite specific filing reasons — like 1099-Q, Payments from Qualified Education Programs (Under Sections 529 and 530).

The main forms you’ll be concerned with will be 1099-MISC (Miscellaneous Income) and 1099-NEC (Nonemployee Compensation). 1099-NEC was introduced by the IRS in 2020 specifically for independent contractors. The 1099-MISC is still used for other filing needs, but the 1099-NEC will be what businesses send independent contractors early each calendar year to report how much they were paid.

For independent contractors, you’ll need to file 1099s yourself since the filings need to be printed on special, government-mandated paper. The IRS has step-by-step instructions related to Forms 1099-MISC and 1099-NEC to make it easy for you.

Most 1099 forms are for individuals and companies won’t need to worry about sending or accounting for, but some other 1099 forms include:

  • 1099-G is issued by a government to individuals who have received unemployment or other money from the state, local or federal government.
  • 1099-K is issued by financial institutions for companies that have accepted payment cards for payments or received payments through a third party network
  • 1099-R is issued by financial institutions to individuals who have received payments from retirement plans, pensions, IRAs, annuities, or similar programs.

Payroll taxes done and dusted

Put the calculator away. Roll withholds your payroll taxes each pay period, files them, and remits payment for you. And there’s no need to stay on top of changing tax laws. Roll proactively alerts you if something important needs your attention.

Taxes for W-2s

Roll files and remits payment for W-2s for your employees. Federal, state and local — we've got you covered.

Taxes for 1099 contractors

For independent contractors, you’ll need to file 1099s yourself since the filings need to be printed on special, government-mandated paper. The IRS has step-by-step instructions related to Forms 1099-MISC (Miscellaneous Income) and 1099-NEC (Nonemployee Compensation) to make it easy for you.

Yearly statements

Every January, Roll delivers tax statements for the previous year to employees and contractors right in the app. They’ll get a notification that says, "Your year-end tax statement is ready" and from there they can view or print the downloadable PDF file containing all their tax information.

“Roll is so simple and easy that it takes me less than 10 minutes to run my entire payroll now. All you do is open the app on your phone, tap the bubble on the bottom, type the word “payroll,” put in the hours, and you’re good to go. It remembers how much everyone gets paid, so it calculates everything for you. And it’s flexible enough to handle a mix of W-2 and 1099 employees. It even has a reminder that comes up that lets you know when it’s time to do payroll. That’s pretty awesome.”

Fernando Faraldo

Denali Interactive Communications
 
 

FAQs

What is an independent contractor?
Whether your workers are employees or independent 1099 contractors will impact how both you and they pay taxes. The IRS has specific guidelines on this. Generally speaking, a worker is considered an independent contractor if the employer has the right to control or direct only the result of the work, but not what will be done or how it will be done. For tax purposes, individuals who meet these criteria pay self-employment tax directly to the IRS or a state tax agency, meaning the hiring entity or payer is not responsible for deducting income tax or Medicare and Social Security taxes from the payments made to the independent contractor.
How are taxes for employees and contractors handled differently?
For employees, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax. In general, you don’t have to withhold or pay taxes on payments to an independent contractor.
Do I need to file a 1099 or a W-2?
A 1099-MISC is typically used to report payments made to independent contractors (who cover their own employment taxes). A W-2 form, on the other hand, is used for employees (whose employer withholds payroll taxes from their earnings).

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