Year-end payroll is where DIY accounting goes to die. Reconciling contractor totals against the $600 reporting threshold, mailing W-2s before the January 31 deadline, filing federal and state returns — miss any of it and you're writing checks to the IRS instead of your team.
Rather than build payroll mechanics from scratch (and become responsible for tax filings in 50 states), TwinBooks pairs with Gusto. You stay in TwinBooks for time tracking, budgeting, and the P&L. Gusto runs the actual payroll engine and carries the regulatory weight. Year-end forms are a side effect.
The split: who does what
The integration draws a clean line between the two systems:
- TwinBooks owns the operational data. Employees, contractors, departments, job titles, hire dates, weekly hours, pay rates (regular / overtime / double-time), pay schedules, and time off. This is the data your operations team touches every day.
- Gusto owns the payroll engine. Tax tables, garnishments, benefits, direct deposit ACH, federal & state withholding, quarterly returns, year-end forms.
- Both stay in sync. Hire someone in TwinBooks, they appear in Gusto. Onboard a contractor in Gusto, they show up in TwinBooks. Two-way sync, no copy-paste.
Running payroll: hours flow once
Pay rates and weekly hours live inside TwinBooks. When the pay period closes, hours push to Gusto with the right multipliers (regular, overtime, double-time) already applied. Gusto calculates federal, state, and local withholding, debits your operating account, and sends direct deposits to the team — all on the same schedule you set once.
On the TwinBooks side, the payroll run posts to your P&L automatically: gross wages, employer taxes, benefits, and net pay each hit the right account. No journal entry, no dragging numbers from a Gusto PDF.
W-2s: handled
For W-2 employees, the cycle is simple: every January, Gusto generates and delivers W-2s to every employee that ran payroll the previous year. They get them by mail, by email, or in their Gusto account — you don't print, stuff, or file anything.
The matching Form W-3 filing with the SSA happens automatically. So do state-level wage reports. The only thing on your plate is reviewing the wage summary at year-end to confirm you agree with the totals — which TwinBooks gives you in a single audit-ready export.
1099-NEC: the $600 question, automated
Contractor reporting is the part most small teams forget until late January. The rule: if you paid a contractor $600 or more during the year, you owe them a 1099-NEC and you owe the IRS one too.
TwinBooks tracks contractor payments year-round through the same bills and bill payments workflow you use for vendors. When a contractor crosses the $600 threshold, Gusto handles the rest:
- 1099-NEC generated and delivered to the contractor
- 1099-NEC filed with the IRS (and applicable states)
- Year-end audit trail kept for your records
You don't schedule it, you don't order forms, you don't pay an extra fee per filing. The threshold check is automatic.
What you actually do at year-end
With TwinBooks plus Gusto, your January looks like this:
- Mid-January: review your year-end wage summary in TwinBooks against Gusto's. They should match — they've been syncing all year.
- End of January: employees start receiving W-2s, contractors receive 1099s.
- Tax filing season: hand your accountant the audit export TwinBooks generates. It's the same data, formatted the way they expect.
That's it. No spreadsheet showdown. No 11pm panic. The boring work of getting forms out the door is exactly the kind of thing software should do for you — and that's what the TwinBooks + Gusto pairing is designed to deliver.