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New 1099 rules on the way from the IRS

4186 Views 7 Replies 6 Participants Last post by  jeff123fish
This is going to be another headache for small operators. And large. I understand that there are efforts underway to repeal this particular section of the leglislation. The way I read it, not only are you going to be sending out a bazillion more 1099's, but some folks' mailboxes are going to explode.


Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.

http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/

And if I may make a preemptive strike here.... let's leave the political bashing for "that other forum...", OK? I posted this as an FYI for business people.
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Wow that will be a nightmare, my list of individuals and corporations will be pretty darn long. I guess thata why they added another 16,000 IRS agents within this bill, to track all the 1099's. :scratch:
 

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Discussion Starter · #4 ·
The is is a pretty good outline of the current guidelines.

http://www.ehow.com/about_5315547_required-send-forms.html


Imagine having to collect the information from the vendors and then issuing 1099's for everyone to whom you paid $600 or more. Utilities, internet connections, insurance, woodenware, packages, nucs, queens, fuel, feed, meds, mechanics, ..... it's nuts.
 

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There must be some exemptions? I drive truck over the road, and with $3.10 a gallon fuel, that would mean I need a 1099 for every gas station and truck stop I fill up at! unbelievable regulations.....
As I understand it if you are operating as a business you will be required to report those purchases if they're over $600. I'm interpreting this based on this comment on an accounting site :

“There is no doubt this will be an administrative nightmare for many businesses in the first year or two,” Jamie Downey, partner at Downey & Co. said in The Boston Globe. “Have a large business-related meal at a restaurant, this will need to be reported on a 1099. Spend a week in a hotel in Waco, Texas; you will need to send a 1099.”

http://www.accountingweb.com/topic/tax/costly-changes-1099-reporting-health-care-bill
I spent many years as an accountant. The implications for this are pretty onerous. Folks who don't operate a business probably don't realize how costly it is to push paper that generates absolutely zero return.
 
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