Part of the Health Care reform act in the US requires YOU to issue a 1099-MISC to any corporation or other entity from whom you (or your little business) have purchased $600 or more in goods or services in the course of business. I guess that'll make for a ton of paperwork for Digikey. You've even got to issue a 1099-MISC to the municipality in which you run your business if you pay property taxes.
The new rules are on the IRS website:
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
Did anyone bother to calculate the cost of providing all this useless information to vendors?
The new rules are on the IRS website:
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
Did anyone bother to calculate the cost of providing all this useless information to vendors?
From the Paper of Record (NY Times)
Will Congress Ease 1099 Requirements in Health Care Bill?
By ROBB MANDELBAUM
The Agenda
In their last week of summer legislating, Republicans and Democrats alike — on both ends of Capitol Hill — made gestures toward repealing a new tax-reporting requirement, raising hopes among small-business advocates who have lobbied fiercely against the measure. But with each side claiming the other’s maneuvers are just feints, the prospects for repealing, or softening, the new law are uncertain at best.
The reporting provision at issue is Section 9006 of the Patient Protection and Affordable Care Act, which adds “amounts in consideration for property” to the types of payments over $600 for which a business must file an information return with the Internal Revenue Service. In addition, the provision also closes a loophole that made payments to corporations exempt from the filing requirement. Under the new law, a company will have to file a Form 1099 with the I.R.S. for every vendor from whom it buys more than $600 in goods.
The section was intended to be a fund-raiser for the rest of the health care bill; it was projected to deliver $19 billion over the course of 10 years by making it more difficult for businesses to keep income unreported. But business groups assailed the new provisions. “This is absolutely unmanageable,” said Bill Rys, tax counsel for the National Federation of Independent Business, which is leading the effort to overturn the law. “It’s not just the amount of time and money businesses will have to spend, but all that goes with collecting this information. Who do you send it to? What do you do with employees who travel and are making purchases on the road?”
The business groups found an ally in the I.R.S.’s own National Taxpayer Advocate, Nina E. Olson, who expressed alarm that the new law “may present significant administrative challenges to taxpayers and the I.R.S.” “The new reporting burden, particularly as it falls on small businesses, may turn out to be disproportionate as compared with any resulting improvement in tax compliance,” Ms. Olson wrote in her midyear report to Congress, released at the end of June.
Those concerns have been percolating up to members of Congress, said Mathew Beck, a spokesman and adviser to Representative Sander Levin, the Michigan Democrat who chairs the House Ways and Means Committee. “Member offices were getting more questions after the signature was put to the law about what exactly is the provision, and how it would impact small business.”
In the Senate, the latest incarnation of Majority Leader Harry Reid’s small-business jobs bill, proposed late Thursday night, offers his colleagues a choice: they can vote on an amendment by Republican Mike Johanns of Nebraska to repeal the new requirement, or they can vote for a Democratic alternative that scales it back. (Of course, individual senators could also vote to do both or to do neither.)
The Democrats’ measure would raise the threshold for reporting goods purchased to $5,000 from $600 and would exempt businesses with 25 or fewer employees from the requirement altogether. It also excludes purchases made by credit card, because these will be reported separately by credit card payment processors under a different law that takes effect in January. These revisions, according to a Finance Committee aide, would likely cost the Treasury $10.1 billion in lost revenue.
Will Congress Ease 1099 Requirements in Health Care Bill?
By ROBB MANDELBAUM
The Agenda
In their last week of summer legislating, Republicans and Democrats alike — on both ends of Capitol Hill — made gestures toward repealing a new tax-reporting requirement, raising hopes among small-business advocates who have lobbied fiercely against the measure. But with each side claiming the other’s maneuvers are just feints, the prospects for repealing, or softening, the new law are uncertain at best.
The reporting provision at issue is Section 9006 of the Patient Protection and Affordable Care Act, which adds “amounts in consideration for property” to the types of payments over $600 for which a business must file an information return with the Internal Revenue Service. In addition, the provision also closes a loophole that made payments to corporations exempt from the filing requirement. Under the new law, a company will have to file a Form 1099 with the I.R.S. for every vendor from whom it buys more than $600 in goods.
The section was intended to be a fund-raiser for the rest of the health care bill; it was projected to deliver $19 billion over the course of 10 years by making it more difficult for businesses to keep income unreported. But business groups assailed the new provisions. “This is absolutely unmanageable,” said Bill Rys, tax counsel for the National Federation of Independent Business, which is leading the effort to overturn the law. “It’s not just the amount of time and money businesses will have to spend, but all that goes with collecting this information. Who do you send it to? What do you do with employees who travel and are making purchases on the road?”
The business groups found an ally in the I.R.S.’s own National Taxpayer Advocate, Nina E. Olson, who expressed alarm that the new law “may present significant administrative challenges to taxpayers and the I.R.S.” “The new reporting burden, particularly as it falls on small businesses, may turn out to be disproportionate as compared with any resulting improvement in tax compliance,” Ms. Olson wrote in her midyear report to Congress, released at the end of June.
Those concerns have been percolating up to members of Congress, said Mathew Beck, a spokesman and adviser to Representative Sander Levin, the Michigan Democrat who chairs the House Ways and Means Committee. “Member offices were getting more questions after the signature was put to the law about what exactly is the provision, and how it would impact small business.”
In the Senate, the latest incarnation of Majority Leader Harry Reid’s small-business jobs bill, proposed late Thursday night, offers his colleagues a choice: they can vote on an amendment by Republican Mike Johanns of Nebraska to repeal the new requirement, or they can vote for a Democratic alternative that scales it back. (Of course, individual senators could also vote to do both or to do neither.)
The Democrats’ measure would raise the threshold for reporting goods purchased to $5,000 from $600 and would exempt businesses with 25 or fewer employees from the requirement altogether. It also excludes purchases made by credit card, because these will be reported separately by credit card payment processors under a different law that takes effect in January. These revisions, according to a Finance Committee aide, would likely cost the Treasury $10.1 billion in lost revenue.
You have to have the vendors TIN before you can even issue a 1099. If you don't have that, you have to send the vendor a W-9 to get it.
I rent space as a sole proprieter in a building I own through an LLC. I guess I now have to 1099 myself on the rent.
But at least snitches are exempted. The govt relies heavily on snitches, and I guess it doesn't want the adminstrative burden of having to W-9 / 1099 them.
Win W5JAG
I rent space as a sole proprieter in a building I own through an LLC. I guess I now have to 1099 myself on the rent.
But at least snitches are exempted. The govt relies heavily on snitches, and I guess it doesn't want the adminstrative burden of having to W-9 / 1099 them.
Win W5JAG
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