6 Reasons Found Simplifies 1099 Contractor Payments

What's the easiest way to pay contractors?

Running a small business means wearing many hats, and managing contractor payments shouldn't eat up your weekends. Found's contractor management tools automate the paperwork, track payments for taxes, and give contractors flexible payment options .

Why paying contractors matters for your business

When you're scaling your business, hiring 1099 contractors gives you specialized skills without full-time employee costs. Twenty percent of Found customers pay contractors, and they're not alone—Google employs more freelancers than permanent workers.

But contractor payments come with complexity: W-9 forms, 1099-NEC filing, payment tracking, and IRS compliance. That's where Found comes in.

6 ways Found streamlines contractor payments

1. Manage your finances in one place

Stop toggling between QuickBooks, invoicing software, and Venmo. With Found, you can do more with less. Found simplifies managing your 1099 contractors from start to finish. From easy onboarding to tracked payments, Found takes care of the nitty-gritty details, saving you time and headaches. You can:

• Request and collect W-9 forms with one click

• Save draft payments and duplicate previous ones

• Schedule payments for future dates

• Track payments made outside Found for 1099 purposes

• Automatically categorize contractor expenses as business deductions

• Generate 1099-NEC forms automatically

You'll save time and get a clearer picture of your business finances.

2. Handle tax compliance 

From W-9s to 1099-NECs, Found takes the work out of paperwork:

• W-9 collection: Request forms from new contractors and send automated reminders

• Secure data handling: Contractors choose how to get paid and enter their own payment details

• 1099-NEC generation: Auto-created for any contractor paid $600+ per year

• January filing: Download and distribute 1099-NECs as PDFs

Everything's digital, secure, and helps you stay on top of the tax year to-do list.

3. Contractor management with no per-contractor fees

Most professional payroll software tools charge monthly fees, often on a per-contractor basis. With a team of five contractors, those costs add up fast.

Found's contractor tools are completely free—no required monthly fees, no per-contractor charges, no hidden costs.⁴ You get comprehensive contractor management without the expense.

4. Maximize your tax deductions

Only 22% of self-employed people take full advantage of tax deductions. Contractor services often qualify as business expenses, but tracking them can be confusing.

Found simplifies the process:

1. Pay contractors through Found

2. Found automatically tags these transactions as business expenses

3. Easily claim them as deductions come tax time

4. Get your Schedule C generated automatically (for sole proprietors)

5. Navigate tax requirements with confidence

Tax requirements constantly change. The new $600 reporting threshold for 1099-K forms (effective 2025) is just one example. Using personal payment apps like Venmo for business blurs the line between personal and business finances.

Found helps you keep your business compliant and audit-ready by maintaining a clear separation between business and personal transactions.

6. Keep contractors happy with flexible payments

Strong contractor relationships depend on timely payments. Found makes paying your contractors when and how they want easy.

Found makes this simple:

• Send payment links via text or email

• Contractors choose their preferred payment method

• Options include instant transfers, bank transfers, or PayPal/Venmo

• Unlimited outbound ACH limits for contractor payments

If contractors sign up for Found, they get instant, free Found-to-Found payments and access to other built-in bookkeeping tools.

Frequently asked questions about paying contractors

How much does Found's contractor management cost?

It's completely free.⁴ Unlike other contractor software, Found has no required monthly or per-contractor fees. 

Can my 1099 contractor choose how to get paid? 

Yes, when you pay a contractor through Found, they can choose from a range of flexible deposit options. It’s as easy as sending a text or email, and they’ll be able to choose the payment method that works best for them. 

Does my 1099 contractor need a Found account to get paid?

No, contractors you pay through Found aren’t required to have a Found account. If they do have an account, they’ll get paid faster⁶, be able to spend their money instantly using their Found debit card, and securely share their W-9 form with you. Signing up for Found is free, and they’ll get access to our powerful bookkeeping and tax-saving features. If they choose a different payment option, there may be fees, and funds typically take up to 1-2 business days to become available.

Are W-9 forms required?

While not always required, W-9 forms prevent complications. Without them, you may need to withhold 24% for backup withholding if you pay a contractor $ 600 or more annually. Generally, it’s best practice to collect a W-9 from each contractor before making any payments, and with Found, it’s easier than ever.

Does Found create 1099-NEC forms?

Yes, Found will create completed 1099-NEC forms for you. Found automatically tracks payments that you make to contractors from your Found account, as well as any additional payments that you’ve recorded manually. If you have paid a contractor $600 or more in a calendar year, you’ll typically need to send your contractor a 1099-NEC and file that form with the IRS. This form is due to the contractor and IRS by January 31. 1099-NECs for the previous year can be downloaded in January as PDFs, which you can then distribute to contractors through email, SMS, or other means. 

Can contractors receive payments through Zelle?

Found doesn't support Zelle, but contractors can choose instant debit card transfers (1.75% fee, $0.50 minimum) or standard ACH bank transfers (1-2 business days).

Disclaimer: The information on this website is not intended to provide, and should not be relied on, for tax advice.

⁴Optional subscription to Found Plus for $19.99/month or $149.99/year. There are no monthly account maintenance fees, but other fees such as transactional fees for wires, instant transfers, and ATM apply. Read more.

⁶Direct deposit funds may be available for use for up to two days before the scheduled payment date. Early availability is not guaranteed.