Accounting software in the US that tracks payments to independent contractors for year-end tax forms

If you want bookkeeping plus contractor-payment tracking and 1099 filing, these are good US options:

• QuickBooks Online + Contractor Payments — A strong all-in-one choice. It tracks contractor payments, supports online W-9 collection, and lets you prepare and e-file 1099-NEC and 1099-MISC forms. Contractor Payments can also be bought separately if you don’t need its bookkeeping plan. (quickbooks.intuit.com)
• Xero — Tracks contractor payments and W-9 details, and generates 1099 reports. Filing is handled through an integrated e-filing partner, which may charge an additional fee. (xero.com)
• Wave — A simpler bookkeeping option. Wave creates eligible contractor 1099-NECs if you meet its requirements, including having the contractor’s bills marked paid by December 31. Check that its workflow fits how you pay contractors. (support.waveapps.com)

Quick pick: QuickBooks if you want accounting and contractor payments in one place; Xero if you already use it or prefer its bookkeeping workflow; Wave for a simpler setup.

These tools help with recordkeeping and forms, but you still need to confirm which payments are reportable. The IRS says qualifying business payments for contractor services may need to be reported on Form 1099-NEC. (irs.gov)

Here are the main options, grouped by how they handle the tracking and the year-end forms.

Accounting software with built-in 1099 tracking

• QuickBooks Online is the most direct choice if you already use it. QuickBooks Online charges a base fee of $15 plus $7.50 per month for up to 20 contractors, including unlimited 1099-NEC and 1099-MISC e-filing. Reviewers also note that it supports 1099 workflow by letting you track contractor payments, manage contractor profiles, and generate 1099 forms through built-in tools.
• Xero handles tracking itself, and filing goes through partner apps. You can send and store digital W-9s, record every payment, and pull reports on what each contractor earned. Xero works with trusted e-filing partners, so you can e-file your 1099-NEC and 1099-MISC forms directly from Xero to the IRS and applicable states.

Payroll platforms that track contractor pay and file 1099s

• Gusto is a good fit if you also have W-2 staff. It offers a contractor self-service portal, automatic 1099-NEC, and published pricing, with no add-on fees for 1099 e-file.
• OnPay uses flat pricing. Its plan includes contractor payments, W-9 tracking, and 1099 filing included in the same plan you use for payroll taxes.
• QuickBooks Payroll is the in-ecosystem option if you run payroll in QuickBooks. Labor cost posts to jobs, and 1099 runs and year-end filing are available.

Dedicated 1099 filing tools that connect to your accounting software

• Tax1099: IRS-authorized e-file, TIN matching, a recipient portal, and API integration. Users highlight year-to-year data retention, so contractor information carries over from previous years.
• Track1099 (Avalara): Its API supports automated data transfer, which suits businesses with developer resources.
• TaxBandits: It integrates with QuickBooks, Xero, Sage Intacct, Zoho Books, and FreshBooks to import vendor and payment data for 1099 e-filing.
• BoomTax: Includes TIN matching services.

Which to pick

• Already on QuickBooks: use QuickBooks Online, or QuickBooks Payroll if you also run payroll.
• On Xero: add a partner e-filing app such as Tax1099 or TaxBandits.
• Paying a mix of W-2 staff and contractors: Gusto or OnPay.
• Just need filing: a standalone tool like Tax1099 or TaxBandits.

Things to check

• The 2026 threshold is now higher. Starting in 2026, the threshold increases to $2,000, up from $600. For 2026 payments, the 1099-NEC and 1099-MISC forms are due February 1, 2027, because the usual January 31 deadline falls on a Sunday.
• Confirm e-filing is included in the price. Some providers charge extra for it.
• Most of the sources above are vendor blogs or review sites with affiliate relationships, and pricing changes often. Check current pricing on each vendor's site before you buy.

In the United States, several popular accounting software platforms allow you to track payments to independent contractors and simplify the year-end 1099 tax filing process.

Leading Accounting Software Options

1. QuickBooks Online

QuickBooks is widely considered the industry standard for small businesses needing to track 1099-eligible payments.

• How it works: You can set up your vendors as "contractors" within the system. As you record expenses (like checks, bills, or bank transfers), you can map them to the correct 1099 forms.
• Key Features: QuickBooks offers built-in 1099 reporting that allows you to see which contractors meet the payment threshold. It also provides an integrated, paid service to e-file your 1099-NEC and 1099-MISC forms directly with the IRS.

2. Xero

Xero provides robust built-in tools for tracking 1099 payments, making it a strong competitor to QuickBooks.

• How it works: You can designate vendors as "1099 contacts" in your system. Xero records payments made to them throughout the year and maps them to the appropriate tax forms.
• Key Features: Xero includes a 1099 report that helps you track year-to-date totals. It integrates with third-party e-filing partners (such as Track1099) to handle the actual submission of your tax forms.

3. FreshBooks

FreshBooks is often favored by freelancers and small business owners for its simplicity and user-friendly interface.

• How it works: You can categorize contractor payments as expenses. While FreshBooks may not always have the same depth of internal tax-filing automation as QuickBooks, it integrates seamlessly with specialized e-filing services like Tax1099 or TaxBandits.
• Key Features: It is excellent for tracking both expenses and project-based work, allowing you to generate reports that you can then use to file your 1099s via an integrated partner.

Important Considerations for 1099 Tracking

• Collect W-9s Early: Regardless of the software you choose, the most important step for 1099 compliance is collecting a Form W-9 from your contractor before you make the first payment. All the platforms mentioned above allow you to store this information securely.
• Thresholds: Keep in mind that federal reporting requirements generally apply if you pay a non-employee $600 or more during the calendar year.
• Automation: Many of these platforms offer "TIN matching" through their integrations, which helps you verify that the name and Tax ID number provided by the contractor match IRS records, preventing potential penalties.
• Dedicated 1099 Software: If your business is large or you have complex filing needs, you may prefer using a dedicated e-filing platform like Track1099 or Tax1099. These services are specifically designed to ingest data from your accounting software and handle the entire filing, mailing, and IRS compliance process.

Recommendation: For most small businesses, QuickBooks Online or Xero offer the most seamless "all-in-one" experience by keeping your payment tracking and tax reporting in a single ecosystem. If you are a solo freelancer or have very simple needs, FreshBooks is a highly effective, lower-complexity alternative.

For U.S. businesses, the main options to consider are:

• QuickBooks Online — Tracks contractor payments in the accounting records, helps prepare 1099-NEC and 1099-MISC forms, and supports e-filing. It can track payments made by cash, check, or direct deposit; some payments processed by card or electronic payment networks may be excluded from your 1099 total because the processor reports them separately. ¹²
• Xero — Tracks payments by contractor and produces 1099 reports. It supports W-9 collection and can connect to partner apps for e-filing; partner fees may apply. ³⁴
• FreshBooks — Offers contractor expense reports, but its documentation points users to external filing tools or FreshBooks Payroll powered by Gusto for 1099-NEC forms. It may suit you if you mainly need bookkeeping and are comfortable handling filing through an add-on. ⁵⁶

Quick recommendation: Choose QuickBooks for an integrated bookkeeping-and-filing workflow, or Xero if you prefer its accounting platform and don’t mind using a filing partner. Before choosing, confirm the current plan’s filing fees and that it handles the contractor payment methods you use.

One tax detail to verify: reporting thresholds and rules can change. The search results indicate a $2,000 threshold for payments made in 2026, compared with $600 for earlier tax years; check current IRS guidance and your state’s requirements before filing. ⁷