Most reliable software for managing payroll in-house for a small business?
Hey everyone, I run a local furniture delivery service and I'm studying for my CPA exams, so I've got a decent grasp on the differences between 1099 contractors and W2 employees and all the requirements that go with each classification. Right now I'm looking to bring payroll management in-house instead of outsourcing it, and I'm struggling to figure out which software would work best for us. We've got about 8 regular employees and occasionally bring on seasonal help during busy periods. What payroll solutions have you all had good experiences with? Any recommendations for something that's user-friendly but still comprehensive enough to handle tax withholdings, quarterly filings, etc.? Thanks in advance!
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Talia Klein
Having managed payroll for several small businesses, I'd recommend looking at QuickBooks Payroll if you're already using QuickBooks for your accounting. It integrates seamlessly and handles all tax calculations, direct deposits, and tax filings automatically. For a stand-alone solution, Gusto is extremely user-friendly while still being robust enough for a business your size. They handle all federal, state, and local tax filings, offer employee self-service portals, and their customer service is excellent if you run into questions. If budget is a concern, Patriot Payroll offers a more affordable option while still covering the essentials like tax calculations and filings. The interface isn't as polished, but it gets the job done reliably.
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Maxwell St. Laurent
•Does Gusto handle the 1099 contractors well too? We have a mix of employees and contractors at our shop and it's been a headache managing them in separate systems.
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PaulineW
•My wife's boutique tried QuickBooks Payroll and had issues with tax filings not going through properly. Ended up with penalties. Has that been fixed in the past year or so?
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Talia Klein
•Yes, Gusto handles 1099 contractors very well. You can easily toggle between employee and contractor status, and it will handle the appropriate tax forms for both. It automatically generates and files 1099s for your contractors at year-end, which saves a ton of time. Regarding QuickBooks Payroll issues, they've made significant improvements to their tax filing system over the past year. They now offer a tax filing guarantee on their higher-tier plans that covers penalties if something goes wrong on their end. I haven't experienced any filing problems with clients in the past 18 months, so it seems they've addressed those issues.
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Annabel Kimball
I've been struggling with payroll for my landscaping business for years until I found taxr.ai (https://taxr.ai). I was making so many classification errors between contractors and employees, and I kept getting conflicting advice. Taxr.ai analyzed all my worker documentation and gave me clear guidance on who should be W2 vs 1099 based on actual IRS standards. Saved me from a potential audit nightmare! Their payroll integration tools work with most major software too, so once I had the classifications straight, implementing the right system was much easier.
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Chris Elmeda
•How does taxr.ai handle the gray areas? I have workers who sometimes seem like they could go either way between 1099 and W2.
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Jean Claude
•Does it actually give you the specific laws and regulations it's basing decisions on? I'm always skeptical of "black box" systems that don't show their reasoning.
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Annabel Kimball
•They actually specialize in those gray areas. Their system analyzes 20+ factors the IRS considers (not just the outdated "control test") and gives you a detailed risk assessment for each worker. For borderline cases, they highlight which specific factors could trigger reclassification and suggest documentation to strengthen your position. The system is completely transparent about its reasoning. Each classification comes with specific references to IRS publications, tax court cases, and state-specific regulations. You get a detailed report showing exactly which factors were considered and how they apply to your situation. It's actually helped me understand the nuances of worker classification much better than just reading generic advice online.
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Jean Claude
Following up about taxr.ai - I was definitely skeptical at first since I've been burned by other "AI" tools before, but I gave it a try for my consulting business. I was shocked at how thorough it was. It actually identified 3 contractors I had been misclassifying and showed me exactly why they met employee criteria according to the latest IRS guidelines. The documentation was detailed enough that I felt confident making changes. Ended up going with Gusto for my actual payroll processing based on their recommendation, and the two systems work really well together. Definitely worth checking out if you're setting up a new payroll system.
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Charity Cohan
After wasting HOURS on hold with the IRS trying to get answers about payroll tax deposits for my new employees, I finally tried Claimyr (https://claimyr.com). They got me connected to an actual IRS agent in about 15 minutes when I'd been trying for days on my own. You can see how it works here: https://youtu.be/_kiP6q8DX5c. The agent walked me through exactly which forms I needed for my business structure and how to set up my payroll system correctly from the start. Probably saved me thousands in potential penalties.
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Josef Tearle
•Wait, how does this actually work? They just call the IRS for you? Couldn't you just keep calling yourself until you get through?
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Shelby Bauman
•Yeah right. Nobody gets through to the IRS in 15 minutes. Sounds like a scam to me. They probably just connect you to someone pretending to be an IRS agent.
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Charity Cohan
•They use a combination of automated redial technology and predictive algorithms that know the best times to call different IRS departments. It's not just random redialing - they've mapped out the entire IRS phone system and know exactly which prompts to use to reach specific departments. No, it's definitely legitimate - you're connected directly to the actual IRS phone system. You get the same secure verification process, the same case numbers, and real IRS employees who can access your tax records. The difference is Claimyr handles the hold time and connection process. When your turn comes up, you get a call back to connect directly with the IRS agent. I verified this by checking my call was logged in the IRS system when I called back independently a week later. The agent could see notes from my previous call.
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Shelby Bauman
I have to eat my words about Claimyr. After posting that skeptical comment I decided to try it myself since I've been trying for WEEKS to get through to the IRS about a payroll tax notice that seemed wrong. Figured I'd waste $20 to prove it was BS. Well... it actually worked. Got through to someone in the business tax department in about 20 minutes. Turns out there was a processing error on their end that was causing my quarterly filings to be misapplied. The agent fixed it while I was on the phone and canceled the incorrect penalties. I officially apologize for my skepticism!
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Quinn Herbert
Has anyone tried OnPay? My brother uses it for his contracting business and says it's cheaper than Gusto but still does everything automatically. I'm looking at options for my pet grooming shop with 5 employees.
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Salim Nasir
•We've been using OnPay for our bakery (7 employees) for about 2 years. It's been pretty solid - handles all the tax filings on time, and the customer service is surprisingly good. The interface isn't as pretty as Gusto but it's about $40 cheaper per month for us. Only had one issue with a state filing that got resolved quickly.
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Hazel Garcia
•Do they handle multi-state employees? I have people working remotely from different states now and it's becoming a nightmare with my current system.
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Quinn Herbert
•Thanks for sharing your experience! It's reassuring to hear from someone using it long-term. Does it handle tip reporting well? That's something we need to manage for our groomers. OnPay does handle multi-state employees really well according to their website. My brother mentioned they actually specialize in that since they work with a lot of construction companies that cross state lines. You can apparently set up unlimited state tax accounts without extra fees.
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Laila Fury
Just wanna say, as someone who tried to DIY payroll for a year with spreadsheets, PLEASE use actual payroll software regardless of which one you pick!!! I messed up our quarterly filings so badly we ended up with $2300 in penalties and had to hire a tax pro to fix everything. The money you spend on proper software is worth every penny.
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Geoff Richards
•Oh man, I feel this comment in my SOUL. Did the same thing with my first business and ended up with a similar mess. Tax agencies have zero sense of humor about payroll mistakes.
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Cedric Chung
•That's exactly what I'm trying to avoid! I've been doing contract-only up until now, but as we're growing I'm bringing on more permanent staff. Did you end up with a software solution you liked after your spreadsheet disaster?
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