New Rules for 1099's

[Diane]

Does this mean that I will have to send Office Depot a 1099? ATX for the purchase of the software? Target/Walmart where I buy some supplies? Which means that I will need ID numbers for all of them?

Diane

[Lion EA]

Yep. Starting writing to your Congresspeople. I use the term "your" very loosely!

[kcjenkins]

Does this mean that I will have to send Office Depot a 1099? ATX for the purchase of the software? Target/Walmart where I buy some supplies? Which means that I will need ID numbers for all of them?

Diane

EXACTLY. That is why this really needs to be changed before it ever comes into play. The amateur tax-code writers in DC these days don't understand half of what they are writing, IMNSHO. This is a crazy, impossible burden to put on every business, just to make the IRS matching more complete. Plus, we know that the IRS will not be able to handle such a flood of new filings, either. I foresee the entire IRS 1099 system crashing if they actually keep this law as currently passed. Not to mention marches on DC that might well turn violent this time. Just reading it makes me want to hit someone.

[bstaxes]

Would that also include electric company, water company, heating oil, how about the real estate taxes or rental fee? Or perhaps gas for the company car? Boy this seems to be getting out of hand. Every check you write you will need info for 1099. Who has the time for this nonsense?

[kcjenkins]

Yep, ALL of those will be required, unless something is changed.

[Jack from Ohio]

Sounds like an opportunity to do a lot of 1099s for a lot of people!! Capitalism at its finest! We charge a reasonable fee $5/1099, every client needs 25-30 or more, ATX keeps a list of providers, seems like a new revenue stream...

[MAMalody]

Does this mean that I will have to send Office Depot a 1099? ATX for the purchase of the software? Target/Walmart where I buy some supplies? Which means that I will need ID numbers for all of them?

Diane

What did I miss?

[bstaxes]

I was thinking last night (that can be dangerous) of the trees that are starting to bloom. In a few years these trees will probably be W9's and 1099's. That would be horrible. Global warming, more floods, less oxygen.... what are our elected officals thinking????? How about saving the trees and be environmentally friendly.

Needed that rant.

[Gail in Virginia]

I was thinking last night (that can be dangerous) of the trees that are starting to bloom. In a few years these trees will probably be W9's and 1099's. That would be horrible. Global warming, more floods, less oxygen.... what are our elected officals thinking????? How about saving the trees and be environmentally friendly.

Needed that rant.

Now I understand. I had wondered what this provision was doing in a bill about health care, but now I understand. Once all the trees are cut down to make 1099's and w-9's, etc. I won't suffer from allergies so much in the spring! What a health care plan! :wacko:

[Eli]

Does this mean that I will have to send Office Depot a 1099? ATX for the purchase of the software? Target/Walmart where I buy some supplies? Which means that I will need ID numbers for all of them?

Diane

Can you please post a link to whatever brought this topic up??

Thanks!

Eli

[TAXBILLY]

April 6th post by KC.

taxbilly

[bstaxes]

Thanks gailtaxed, I really needed that laugh. Maybe it will help all with allergies and we wont need any meds. So sorry med manufacturers.

[Cathy]

What did I miss?

Please let me in on it when you find out! I guess it's somewhere in the 896 unopened emails that IRS has sent since January!

:spaz:

[kcjenkins]

Here is the original post that this thread was in reference to:

Posted 06 April 2010 - 04:24 PM

The passage of the Healthcare reform bill included some of the most drastic changes to 1099 information reporting in over a decade. The bill included revenue raising provisions meant to seek greater compliance of the tax code via 1099 information reporting. General provisions included:

Ø The elimination of the corporate exemption from 1099-MISC reporting. (Public Law 111-148)

Ø The requirement to report payments for property (goods, materials, merchandise, supplies, etc.). (Public Law 111-148)

Ø A six-fold increase in penalties from $250,000 to 1.5 million. (H.R.4213, H.R.4849)

Ø A doubling of penalties per record from $50 to $100. (H.R.4213, H.R.4849)

Beginning for payments made after December 31, 2011, companies will be required to furnish and file form 1099-MISC for payments made to all for-profit companies regardless of corporate status. In addition all payments for goods, materials, merchandise, supplies, and other property will need to be reported as well. Early indications reveal that these changes will likely cause the 1099 reporting volume to increase significantly for most companies as well as the associated B-Notices. [You think?????]

While the law applies to payments made after December 31, 2011 companies need to make broad changes to:

1) W-9 procedures to include all vendors.

2) Solicit W-9's for corporate vendors.

3) Prepare for larger 1099 year-end printing, mailing, and filing.

4) Make the appropriate budgetary and system updates to accommodate these changes.

[TaxmannEA]

Hey Guys!!

I just had a (paranoid) thought! These new rules would make it rather easy for a well-connected someone to track who does business with whom, how much is being paid, who do you associate with in a business, etc. I wonder if there is a tax-related reason for this, or if the motive might be somewhat more sinister. There is such a thing as too much knowledge when government (or even giant corporations)is involved.

[Lion EA]

I would suggest you open emails from IRS during tax season especially!

[bstaxes]

Like your thought TaxmannEA. What ever is on those 1099's are your expenses but the IRS gets to look at it by company or individual. BIG BROTHER is watching.

[grandmabee]

just a thought.... I charge alot of my business expenses on my charge card and then pay it at the end of the month. So will I file a 1099 to Discover? I charge ATX, staples, lots of expense

[Kea]

Just to the vendors. But if you pay Discover over $600 in interest, then maybe you would have to send one to them. Hmmmmm.

[grandmabee]

Just to the vendors. But if you pay Discover over $600 in interest, then maybe you would have to send one to them. Hmmmmm.

What I am asking if I charge and not pay vendors directly would the requirement to file 1099 still be in place?

[Gail in Virginia]

What I am asking if I charge and not pay vendors directly would the requirement to file 1099 still be in place?

It has never made any difference how you pay your vendors - a payment is a payment. So yes, if you use a credit card for all of your bills, you would still have to prepare 1099's as appropriate.

[grandmabee]

It has never made any difference how you pay your vendors - a payment is a payment. So yes, if you use a credit card for all of your bills, you would still have to prepare 1099's as appropriate.

UPDate.... If you charge expenses on your credit card you DONOT have to send a 1099. The credit card companies are responsible to file the new form 1099K for all charges.

[joanmcq]

Lets hear it for charge cards!

[OldJack]

The IRS is trying to overcome the "cash" under the table business. I'll bet it makes it worse!

[joanmcq]

The IRS is trying to overcome the "cash" under the table business. I'll bet it makes it worse!

Not if you want to deduct your expenses! The fines for not filing are going up too.