Avalara, a provider of tax compliance automation software for businesses of all sizes, has acquired Track1099 LLC, a company that provides online software and services for cost-effectively managing, e-filing, and e-delivering IRS forms, including 1099s, W-2s, W-9s, and more.
The financial terms of the deal were not disclosed. Avalara acquired the assets of Track1099, adding technology, content, and expertise to its platform and team.
In a similar move, Avalara back in April acquired DAVO Technologies to automate the daily sales tax requirements for emerging small businesses. With the acquisition of Track1099, Avalara furthers its vision of being the leading global compliance platform for businesses.
As to this purchase, every year, business clients must file information and withholding forms to report employee and contractor income to the IRS. There were an estimated 3.5 billion of these forms filed in 2020.
Moving forward, more companies will be required to e-file when the IRS reduces the e-filing threshold from 250 to 100 forms for each business. Track1099 supported more than 40,000 customers with their filing needs in tax year 2020. To best serve the needs of its customers, Track1099 provides 1099 filing on a cost-effective, tiered, per-form pricing basis and an annual subscription for W-9s.
Federal and state regulations for compliance are constantly changing. For example, in tax year 2020, the 1099-NEC was introduced to replace 1099-MISC Box 7 for nonemployee compensation.
Several states changed their mandatory filing requirements to adjust for this new form. The addition of Track1099’s software to Avalara’s suite of compliance management services will simplify federal and state electronic filing compliance for businesses of all sizes.