1099s in 2012

[TAXBILLY]

http://blogs.forbes.com/robertwood/2010/10/22/let-there-be-forms-1099/

taxbilly

[Catherine]

http://blogs.forbes....-be-forms-1099/

taxbilly

Shut the IRS down by flooding them with 1099's for every type of payment imaginable? Sounds like it may be possible. Jan 2012 looks to be interesting - unless Congress does the sensible thing and puts a stop to this nonsense before it starts.

[TAXBILLY]

After reading the article I see that the author himself (a tax lawyer) gets confused as to what the law says for 2011 and 2012.

taxbilly

[Kea]

The author also didn't mention that the law did not apply to credit card purchases.

But, I agree with Catherine the best option is to repeal that provision before it starts.

[JohnH]

He's also confused about something else. In another article, he suggests the old nonsense about a business owner worried about being denied a tax deduction for failing to issue a 1099. I've also seen this misninformation thrown around on tax forums for years, yet there's absolutely no cite to support such a notion. (I think I saw one tax preparer mention that it came up in an audit, but even there the issue was murky). Maybe the law will be changed in the future, but as things currently stand there's simply no support for making such a statement.

However, I do agree with the basic premise of the article, and I'll gladly do my part to contribute to the paperwork blizzrd if the law isn't changed.

[jainen]

>>the author himself (a tax lawyer) gets confused as to what the law says<<

The author either doesn't know or doesn't care about the difference between "fowl" and "foul." He is careless writer, and his scree is just another unsupported rant. He supports no valid points at all, but just strings a lot of cliches and emotional buzzwords together.

The law does call for paperwork, but only in a format that has been reliably integrated into good accounting software for years. At the same time it will reduce tax prep burdens, and add plenty of new account analysis capability for budgeting and even marketing. And it only uses data the business already has entered and controls on its books. In my opinion, this is a good law that accomplishes an important goal of the tax system with minimal burden to the taxpayers.

In my further opinion, thinking a blizzard of forms will paralyze the IRS is terribly naive.

[Catherine]

<snip>

In my further opinion, thinking a blizzard of forms will paralyze the IRS is terribly naive.

Ah, but overloading the servers with a blizzard of form submittals is well-established.

[MAMalody]

Actually, the more the IRS computerizes the less likely they are to process paper properly, especially, if it comes in a massive volume. What I am going to do is go out and buy some stock in some red ink company.

[joanmcq]

>>the author himself (a tax lawyer) gets confused as to what the law says<<

The author either doesn't know or doesn't care about the difference between "fowl" and "foul." He is careless writer, and his scree is just another unsupported rant. He supports no valid points at all, but just strings a lot of cliches and emotional buzzwords together.

The law does call for paperwork, but only in a format that has been reliably integrated into good accounting software for years. At the same time it will reduce tax prep burdens, and add plenty of new account analysis capability for budgeting and even marketing. And it only uses data the business already has entered and controls on its books. In my opinion, this is a good law that accomplishes an important goal of the tax system with minimal burden to the taxpayers.

In my further opinion, thinking a blizzard of forms will paralyze the IRS is terribly naive.

Thank you Jainen. I'm going to bet there was a lot of complaining when W-2s were first introduced too. And 1098s. And k-1s. Oh, and BTW, I have seen deductions denied in audit due to lack of 1099s. Especially if paid in cash. Even if by check, how do you prove that check to Joe Smith was for services for the business, or for a (personal use)used boat you bought off of him? Oh yeah, our clients never ever pay for personal stuff through the business account. On the flipside, the easiest way of getting through an audit of something like contractor payments is to submit copies of the 1099s. The auditor will make sure they were actually filed, but that's generally all.

So now let's imagine an audit of 'supplies'. Instead of having to provide a pile of receipts and cancelled checks and/or bank statements, our clients just have to show the 1099s. Wow! Imagine that! This new requirement having an upside!

[TAXBILLY]

What?

Congressmen from both parties actually working together for the citizens? Kumbaya!

http://money.cnn.com/2010/11/12/smallbusiness/baucus_1099_repeal/index.htm

[taxxcpa]

People with a few rent houses are going to find it difficult. For those of us who have accounting software, it would be fairly easy to run a report based on vendors as well as by type of account. But for someone who just adds a bunch of receipts for supplies, repairs, etc., the job of determining who to send 1099s and getting their SSN and address every time they hire someone to mow the grass is going to be more of a problem.

Also, there is the expense of filing the 1099s. Unless the person has software to do the job, he has to fill them out manually or pay someone to do it for him. It may mean more income for us, but it is not something Joe SixPack is going to like.

[mcb39]

After two days of tax classes, the subject is indeed murky. The general consensus is that it "probably" will be repealed before it goes into effect. However, it is law at the moment. Of more immediate concern to us are whether any of the elapsed credits will be reinstated before filing season; which is fast approaching. The "DRAFT" forms that we saw have lines deliberately left blank "just in case". We can quite likely expect a late start to filing due to lack of form approval; due to uncertainty over legislation. Get Ready!