In an attempt to help pay for the health care spending bill Congress recently passed, a small provision unrelated to health care was added to page 737. According to this provision, any business making purchases from another business greater than $600 annually (in aggregate over the year) will need to get their Tax ID Number and send that business a 1099 form declaring the purchase.
While paying for the added cost of the health care bill (versus furthering the debt) is noble, this little provision is going to be a real stinker for my company. Currently we only have to file a couple 1099s each year to send to freelancers that work for us. In 2012 we'll need to file these for the majority of our purchases. Sure, it'll only take another 5-10 hours a year, but the value of that time lost is several hundred dollars.
So, my question for you is, how is this going to affect your business? If you think it will hurt you, how do we fix this? Do we try to repeal this specific portion of the bill? Do we contact the IRS and file a complaint?
Please share your thoughts.
P.S. I know we're not supposed to link spam this forum, but I think this article published by Business Week explains the 1099 situation far better than I ever could:
alliantgroup | Window Shopper |
8/5/2010 - 11:36 am
In 2012, the health care reform law will require ALL businesses, governments and charities to issue 1099 forms to vendors they pay over $600 for goods and services. This will undoubtedly financially crush thousands of small-and-medium-sized businesses who work for these companies. Read alliantgroups' (alliantgroup.com) Dean Zerbe's take on the 1099 burden and where its repeal currently stands in Congress and the administration. http:// bit.ly/cG7USr
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The idea seems to be that using 1099 forms to capture unreported income will generate more government revenue and help offset the cost of the health bill.
This ridiculous new law will require millions of additional 1099 forms to be sent out. So, buck up my fellow business men and women. Your tax administrative burden just got a lot heavier.
alliantgroup | Window Shopper | 8/5/2010 - 11:36 am
alfredlive | Creator | 8/4/2010 - 5:18 pm
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